#Liquidity101 Liquidity is one of the most important factors you need to understand before entering any trade in the cryptocurrency market. When the market is highly liquid, you can execute your orders quickly and with the smallest price difference. However, if liquidity is low, the trade may be executed at a price different from what you planned. This is called slippage. How to assess liquidity? Review the daily trading volume of the pair you intend to trade and monitor the order book depth. If you notice large gaps between the buy and sell prices, this is an indicator of weak liquidity. Strategies to reduce slippage: Use limit orders instead of market orders. Avoid trading during major news events and choose pairs with high volume, such as BTCUSDT.