tradingconcepts

📊 WHAT IS MARKET LIQUIDITY IN CRYPTO?

Market liquidity describes how easily an asset can be bought or sold without significantly affecting its price.

Let's understand two situations:

🟢 HIGH LIQUIDITY

- More available market depth.
- Usually tighter bid-ask spreads.
- Lower price impact for comparable orders.

🔴 LOW LIQUIDITY

- Less available market depth.
- Potentially wider spreads.
- Greater price impact from the same order.

Remember: Trading volume and market liquidity are related, but they are not the same thing.

💬 QUESTION: Why do you think the same order can affect two cryptocurrency markets differently?

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