#Liquidity101 Heard the word “liquidity” a lot in crypto but not sure what it means? Let’s break it down 👇

🔹 Liquidity means how easily you can buy or sell a crypto asset without affecting its price too much.

🔹 High liquidity = fast trades, tighter spreads, better prices. (e.g., BTC, ETH)

🔹 Low liquidity = slow trades, big price swings, higher slippage. (e.g., small-cap tokens)

Why does it matter?

✔️ High liquidity = safer and smoother trading

✔️ Low liquidity = higher risk and volatility

Where does liquidity come from?

📈 On CEXs, it comes from order books filled by traders.

🌐 On DEXs, it comes from liquidity pools funded by users.

📌 Pro Tip: Always check liquidity before trading any token. It helps avoid unexpected losses or delays.

Still confused or want to learn more?

💬 Drop your questions below!