What is liquidity in the context of cryptocurrencies?

Liquidity is the ability to quickly buy or sell an asset without significant changes in its price. In the world of cryptocurrencies, liquidity plays a key role in ensuring stability and accessibility of transactions. The higher the liquidity in the market, the easier it is to find a buyer or seller at the desired price. On cryptocurrency exchanges, liquidity depends on trading volume, the number of active users, and the variety of available currency pairs. Without sufficient liquidity, trading becomes riskier as large transactions can significantly impact the price.