The liquidity of a coin is its ability to be quickly bought or sold in the market without significantly impacting the price.
🔹 High liquidity means that many people are willing to buy or sell the coin, so transactions occur quickly and without large changes in value.
🔹 Low liquidity means that there are few buyers and sellers, so selling a large number of coins can significantly change the price.
A simple example: if you have a popular product, it is easy to sell it at market price. But if the product is rare, finding a buyer is more difficult, and you will have to either wait a long time or lower the price.
Low liquidity can lead to sharp price fluctuations, as large transactions can significantly change the market value of the asset.