Educational Post: What is LIQUIDITY? Liquidity, in cryptocurr | Charts | Signals &Trading

Educational Post:
What is LIQUIDITY?
Liquidity, in cryptocurrency, is the ease at which a digital token is converted to cash or another digital asset without affecting the price. At its core, liquidity reflects the overall health of the cryptocurrency market. Thus, the more liquid a crypto is, the less volatile and more stable the asset.
. Asset liquidity is when there are buyers and sellers for that asset.
. Exchange liquidity is when there are makers and takers on the platform and desired trading pairs to use.
. Market liquidity is when all these pieces together make up how healthy the crypto market is.

Just like Paul Krugman, the winner of the 2008 Nobel prize in Economics, put it: “Liquidity for markets is what oil is for car engines.”
Liquidity is the lifeline of the crypto market. It reduces investment risk; and, importantly, helps define your exit strategy — making it easy to liquidate your holding. As a result, investors and traders prefer liquid markets.

@ChartsSignalsTrading