#CryptoCharts101 Types of Liquidity:

Market Liquidity: The ease with which

assets can be bought or sold in the market

without impacting prices. Examples

include major stock exchanges like NSE

and BSE, forex markets, and government

securities|I

Accounting Liquidity: The ability to meet

financial obligations using liquid assets.

This can be measured using ratios like

current ratio and cash ratio

Importance of Liquidity:

Facilitates Efficient Trading: Higher liquidity

ensures that investors can buy or sell

assets quickly and at fair prices

Helps in Risk Management: Liquidity

enables investors to exit positions during

crises or uncertainty, managing risk

effectively

More Attractive to Investors: Highly liquid

assets are more flexible and easier to

enter and exit, making them attractive to

investors

Strategies to Enhance Liquidity:

Create Regular Forecasts: Develop

short-term forecasts to make smarter

financial decisions and adapt to

disruptions |l