#Liquidity101 Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity means fast transactions with minimal slippage (e.g., Bitcoin on Binance). Low liquidity leads to wider spreads and price volatility (e.g., small-cap altcoins). Centralized exchanges (CEX) like Binance offer deep liquidity due to high trading volumes, while decentralized exchanges (DEX) often struggle with thinner order books. Market makers and large traders enhance liquidity by providing buy/sell orders. Liquid markets are safer for traders, while illiquid ones carry higher risks. Liquidity is crucial for efficient trading, fair pricing, and reducing manipulation in crypto markets.