People are sometimes confused about what liquidity is. When we buy or sell, liquidity makes our deals. Our orders will be waiting if there is no liquidity.

*One of the examples of liquidity that we see in exchanges is the "order book". The only thing we view as orders in the order book is liquidity. There is no liquidity if the order book is empty.


Maybe someone asks, why the price is still moving even there is no orders in the order book in the exchange? We must consider that cryptocurrency may be listed on multiple exchanges, including CEX and DEX. So, if there is no liquidity in this exchange but strong price action, it means that liquidity exists in other exchanges.