#Liquidity101 #Liquidity101 – The money that moves the market If you have ever bought a token and couldn't sell it without losing much... you encountered low liquidity. But what exactly is liquidity in crypto? Liquidity is the ease of buying or selling an asset without significantly affecting its price. When there are many buyers and sellers, there is high liquidity, which means better prices and fast execution. When there are few, liquidity is low, causing high spreads, slow orders, and more risk. High liquidity means less unexpected volatility, fast execution, and a smaller difference between buy and sell prices. In contrast, low liquidity implies the risk of “slippage” (the price changes while you buy), difficulty in exiting a position, and potential price manipulation.