Liquidity
The ease with which an asset can be bought or sold without significantly affecting its price.
Liquidity describes how easily a cryptocurrency can be exchanged for another currency (or vice versa) without significantly affecting its market price. High liquidity means that even a large buy or sell order will be executed close to the current market price, because there are enough counterparties on the other side in the order book (or in the DEX pool).
Low liquidity, typical of smaller altcoins, increases the risk of significant slippage on larger orders and makes it easier for individual large investors (whales) to manipulate the price.
Related terms
Slippage
The difference between the expected and actually executed price of a transaction, resulting from a price change or low market liquidity.
Whale
A person or entity holding such a large amount of a given cryptocurrency that its transactions can noticeably affect the price.
Market Capitalization (Market Cap)
The total value of all units of a given cryptocurrency in circulation, calculated as price multiplied by circulating supply.