it means theres lots of buy and sells on a given market for a given coin basically
Liquidity in a crpyto market just means you will be able to move freely in the market, sell or buy a decent amount without moving the price too much
If a coin dosent have liquidity, you will crush the price trying to sell a few coins, or moon it.
When you see those shitcoin on CMC do 100%+ a day gains? thats just lack of liquidity, so the price jumped when someone bought 0.1
BTC worth lol