Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. High-liquidity assets have tighter spreads and less slippage; low-liquidity ones can spike or crash on relatively small orders.

Before trading any asset — especially smaller-cap tokens — check trading volume and order book depth. Low liquidity isn’t inherently bad, but it means higher risk and unpredictability.

Educational content only. Not financial advice. DYOR. 💧