Liquidity in crypto refers to how easily a digital asset can be bought or sold without significantly affecting its price. High liquidity means tighter spreads, faster trades, and more price stability. For example, trading Bitcoin on Binance is like buying bottled water at a supermarket—plenty of supply and demand. But trading a niche altcoin on a small exchange is like trying to sell rare art at a local flea market—few buyers, wide price gaps, and delays. Low liquidity can trap investors in volatile moves. Always check volume and order book depth before trading, especially with lesser-known tokens.
