#Liquidity101

Liquidity is a core concept in crypto and traditional markets. It refers to how easily an asset can be bought or sold without causing significant price changes. High liquidity means smoother trades, tighter spreads, and less slippage—ideal conditions for traders. Low liquidity, on the other hand, can lead to volatility and difficulty entering or exiting positions. Liquidity is influenced by trading volume, market depth, and the number of active participants. Understanding liquidity helps traders manage risk and make informed decisions, especially in fast-moving markets. Always consider liquidity before executing large trades.