#Liquidity101
Understanding liquidity is essential in crypto trading. Liquidity refers to how easily an asset can be bought or sold without affecting its price. In high-liquidity markets, like BTC/USDT or ETH/USDT, trades are executed quickly with minimal slippage. Low-liquidity pairs, on the other hand, often experience wide spreads and price volatility. As a trader, choosing a liquid pair ensures smoother execution and less risk of losses from market impact. Liquidity also reflects trust—projects with strong liquidity are often backed by reliable communities and exchanges. Always check the order book and trading volume before placing large trades.
