#Liquidity101
đ Understanding Liquidity in Crypto
Liquidity refers to how easily a cryptocurrency can be bought or sold without causing major price changes. đ§ High liquidity means there are many active buyers and sellers, allowing smooth and fast trades. ⥠It results in tighter spreads, reduced slippage, and more stable prices. đ Low liquidity can make trading difficult, leading to price swings and poor execution. đ For traders and investors, strong liquidity improves market efficiency and confidence. â Itâs a key factor when choosing a token or exchange, especially for large trades or frequent transactions.