#Liquidity101 Liquidity refers to how easily an asset can be bought or sold without affecting its price. High liquidity means you can trade quickly with minimal price changes — common in markets like Bitcoin or major stocks. Low liquidity means fewer buyers/sellers, causing price swings when trades happen. Liquidity is crucial because it affects slippage, spreads, and trade execution. Centralized exchanges often provide deep liquidity, while some smaller or new tokens on DEXs may have low liquidity. Always check liquidity before trading — it protects you from unexpected losses and ensures smoother transactions. Liquidity = smoother, safer trading.