Liquidity refers to how easily an asset can be bought or sold without significantly affecting its price. In cryptocurrency markets, high liquidity allows traders to enter and exit positions quickly.
Markets with low liquidity often experience sharp price movements and higher volatility. This is why large exchanges focus on maintaining deep liquidity pools for major cryptocurrencies.
As institutional investors continue entering the crypto space, overall market liquidity is expected to improve, making the ecosystem more stable and attractive to global investors.
