Liquidity is the ease with which an asset can be bought or sold without significantly affecting the market price. The higher the liquidity, the faster and more efficiently transactions occur.
🔍 Why is Liquidity Important?
✅ Faster Transactions
✅ Tighter Spread (buy & sell prices are closer)
✅ Lower Slippage Risk
🧪 Simple Example:
The BTC/USDT market on Binance has high liquidity. This means you can sell or buy in large amounts without moving the price too far.
📊 Factors Affecting Liquidity:
Trading volume
Number of market participants
Presence of market makers & liquidity providers
📌 Tip: Always check liquidity before trading altcoins or new tokens. Low liquidity can get you "stuck"!
💬 Come on, share your experiences about trading in markets with low/high liquidity!
