#Liquidity101

Liquidity refers to how easily an asset can be bought or sold without causing major price changes. High liquidity means there are many buyers and sellers, allowing fast, smooth trades — like with Bitcoin or stablecoins. Low liquidity means fewer participants, leading to slippage or delayed orders. In crypto, centralized exchanges usually offer higher liquidity than DEXs, but that’s changing as DeFi grows. Liquidity is crucial for traders because it affects entry, exit, and pricing accuracy. Liquidity pools in DEXs also let users earn fees by providing tokens. Whether you're trading or investing, understanding liquidity helps you avoid costly mistakes and make smarter moves in both bull and bear markets.