This topic is very related to economy and finance and once my professor taught this to me what I concluded from it is that when a person buys or sells a currency and go to another it's called liquidity.  This is a very very simple definition that I made from my studies and of course you are a newbie so this definition will make you more clear about liquidity.  There are many other definitions of liquidity and everyone is right. However for better understanding, I am giving you another definition which said that liquidity is the process when someone buys or sells a cryptocurrency without affecting its price significantly.  For more information I am giving you a link go and read it,  you will understand easily from.
https://www.bitcoin.com/get-started/what-is-liquidity/