What Is Liquidity in Crypto?
If you’ve ever asked: “Why did price spike suddenly?” “Why did my stop-loss get hit and price reversed?” “Why does BTC move fast at certain times?”
The answer is liquidity.
So what is liquidity?
Liquidity is where buy and sell orders are sitting in the market.
Think of liquidity like: 🎯 magnets for price.
Price doesn’t move randomly.
It moves toward areas where orders exist.
That’s why you often see: • Sudden spikes
• Fast wicks
• Fake breakouts
• Stop-loss hunts
Price is simply searching for liquidity.
Why traders care about liquidity
Big players (institutions, whales) cannot enter or exit randomly.
They need large pools of orders.
So price often moves: • Above recent highs
• Below recent lows
• Into obvious support/resistance
Not to trick you —
but because that’s where liquidity lives.
Common beginner mistake
New traders think: “Market manipulated me.”
Reality: You placed your stop-loss
exactly where everyone else did.
Liquidity is not evil.
It’s how markets function.
How smart traders use this
They don’t chase breakouts blindly.
They ask: “Where would most people put their stop-loss?”
That area often becomes the target.
Key takeaway
Price doesn’t move because of indicators.
Price moves because of orders.
Understand liquidity —
and the market starts making sense.
