#Liquidity101 Liquidity measures how easily assets can be bought or sold without significantly affecting the price. Markets with high liquidity (such as BTC/USD) have deep order books, tight spreads, and high volume, allowing for quick execution with minimal slippage. In contrast, low liquidity markets tend to be volatile and risky. Liquidity is important for traders as it affects transaction speed and implicit costs. Factors that influence liquidity include the number of market participants, daily volume, and exchange mechanisms. Understanding liquidity helps in selecting suitable pairs and trading strategies.