#Liquidity101 Liquidity refers to how quickly and easily an asset can be bought or sold without significantly affecting its price. In highly liquid markets, like major cryptocurrencies or stocks, trades happen swiftly with minimal price slippage. Low liquidity, often found in small-cap assets or obscure tokens, leads to wider spreads and increased volatility. Market liquidity ensures smoother trading and tighter bid-ask spreads, while exchange liquidity reflects the volume available on a specific platform. High liquidity benefits traders by offering better pricing and faster execution. Understanding #Liquidity101 is crucial for risk management and making informed trading decisions in dynamic markets.