Liquidity refers to how easily an asset can be converted into cash or another asset without causing a significant change in its price. In the context of cryptocurrencies, high liquidity ensures that transactions can be executed smoothly and efficiently.
It is a key factor for traders, as it affects the ease of entering and exiting positions, and helps reduce slippage during trades.
Market liquidity is essential for maintaining stable prices and ensuring the overall health of the financial ecosystem.
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