#Liquidity101 What Is Liquidity – And Why Should You Care?

Liquidity refers to how easily an asset can be bought or sold without causing a significant change in its price. High liquidity means smoother and faster transactions.

Major coins like Bitcoin and Ethereum are highly liquid. However, tokens with smaller market capitalizations often have lower liquidity – selling them can lead to a significant price drop.

Liquidity is important for traders and investors: it affects how quickly you can enter or exit the market. Always check trading volume and order book depth before taking action.