Trading & Technical Analysis

What is liquidity in a crypto market?

Liquidity in a crypto market is how easily an asset can be bought or sold without moving its price much. A deeply liquid market has many buyers and sellers, tight bid-ask spreads, and large order book depth, so trades fill close to the quoted price. Bitcoin is highly liquid; a small-cap token may take a large price slip to fill a sizeable order. Liquidity tends to thin out in volatile conditions, widening spreads exactly when you most want to exit.