#Liquidity101 Liquidity in the crypto market refers to how easily a digital asset can be bought or sold without significantly affecting its price. High liquidity means there are many buyers and sellers, allowing for smooth, fast trades at stable prices. This is common with major cryptocurrencies like Bitcoin and Ethereum. Low liquidity, often seen in smaller or newer tokens, can lead to price slippage, delays, and difficulty exiting positions. Liquidity is influenced by trading volume, exchange listings, and market interest. It’s crucial for investors because it affects risk, pricing, and strategy execution. In general, higher liquidity equals lower trading costs and more efficient markets, making it a key factor in crypto trading success.