TradingBeginner

Liquidity

The ability to trade an amount of an asset without a large delay or adverse price effect.

PLAIN-ENGLISH DEFINITION

In more detail

A liquid market has enough usable orders or pool assets to absorb trades with relatively little disruption. The amount matters: a market comfortable for a small swap may be thin for a large one. Reported trading volume is a different measurement and does not establish what liquidity is available now.

IN THE WILD

How you might use it

The small swap quote looks fine; increase the amount and the same thin pool suddenly shows much worse execution.

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By Crypto Dictionary · Published · Updated

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