Check Liquidity Before you invest

[vvu351]

Good point and at the same time investors should watch out because Liquidity can be faked out as well as trading volume, the example is on Coinmarketcap now, with liquidity rating you can still see P2PB2B exchange on the high ranking position

Of course, now a lot of liquidity in the cryptocurrency market has not been shown accurately. But we can’t just agree with large trading volumes.

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[khunyung]

Speaking of liquidity which means that it can easily be exchanged, it must be followed where the place of exchange which is easy, not only easy but we must choose an exchange that has good reviews or is used by many real people.

Funny enough, but I'm pretty sure most of the big companies took care of reviews on their service so you won't now the clear truth anyway

[letyouearn]

Also one should be careful with different noname exchanges. They may have awful conditions for trading or withdrawing your money. Also there may be some stupid bugs in their scripts. And yeah, low volumes of course.

[CryptopreneurBrainboss]

The altcoin market is more complex then you can ever think of. There are thousands of ways of scamming you which you can never imagine, even after being scam, you can't realize that it was a scam. Before invest, be smart enough to learn the tactics and save yourself.

Well said and one of the ways to avoid falling victims to liquidity scam is by been aware of exchanges where such project you intend investing in is listed. Coins/tokens that are listed on newly launched exchange irrespective of how promising they look should be given given a second thought due to the reason stated by the OP (Low liquidity).

This scam isn't associated with only unpopular exchanges as mercatox and c-cex which are somewhat popular exchanges are also guilty of having low liquidity for coins listed on their platform due to the size of the customers they have and usually such project price movement could easily be manipulated. That's whay you find many altcoins getting pumped are usually listed on C-Cex exchange.

[wedosgibas]

Speaking of liquidity which means that it can easily be exchanged, it must be followed where the place of exchange which is easy, not only easy but we must choose an exchange that has good reviews or is used by many real people.

Funny enough, but I'm pretty sure most of the big companies took care of reviews on their service so you won't now the clear truth anyway

In fact, now we see or differentiate crypto exchanges that can influence, such as Binance, Kucoin, OKex, Upbit, Bithumb and several others. And others are still a lot of exchanges, but not quite influential, because users only come and go, even though their service looks good.

[matchi2011]

Good point and at the same time investors should watch out because Liquidity can be faked out as well as trading volume, the example is on Coinmarketcap now, with liquidity rating you can still see P2PB2B exchange on the high ranking position

Of course, now a lot of liquidity in the cryptocurrency market has not been shown accurately. But we can’t just agree with large trading volumes.

Liquidity always prone with wrong information or can be manipulate by trading exchange and developers, bots are easily being injected to attract
traders to use the exchange and start buying, it's needs to be well  analyze before riding since there's also possibilities that you'll be burned and
be stuck with your holdings, taking care of your money is very crucial you needs to observe and study every position to take.

[lisasteca]

The altcoin market is more complex then you can ever think of. There are thousands of ways of scamming you which you can never imagine, even after being scam, you can't realize that it was a scam. Before invest, be smart enough to learn the tactics and save yourself.

I would advice for most people to not try to trade crypto at all, it's a very easy way to burn your money, especially if you believe that you can find a "good project". Just holding Bitcoin is more than enough, it's growth rate is incredible compared to more traditional investments, but people get greedy and start looking at alts thinking they'll grow faster and higher.

Agree with you mate, trade crypto is not like couple years ago, today you can loose lot money on trading if you are not good trader, better to hold your coin and make profit!

[meanwords]

Dude, this is literally what I look for when it comes to coins after price. I had this project once where it pump 200% in a single day and as I was planning to sell it, there's just no buyers in it, all were selling at the time. In my opinion, buying a low liquidity coin is like buying a lottery ticket. If it pumps, you win big which rarely happens but when it dump, all your money is gone and it happens most of the time. High risk, low reward in short.

I just want to point out, exchanges plays a really vital role when it comes to liquidity. The liquidity of a coin depends on each exchange and you should all possible exchanges before investing in a coin.

[Pecunia non olet]

Savedroid token is a good example how important is the liquidity, they were delisted from HitBTC, they are only on IDEX, but you are not able to buy or sell the tokens because noone is really using IDEX exchange.

[sharpshooter.]

Personally, I invest only in those currencies in which I am 99.9% sure. About 2 years ago, I remember people who invested in different tokens and shitcoins, as a result, they were left with nothing. While I managed to make a small profit on my investments. Personally, I would not take the risk and invest in second-rate currencies, my choice is the top 5-10 of the most popular altcoins.

[Davian144]

Its a good advice, but check the use cases is advice on top of this. If there will be real use cases we will see real liquidity

And how can we examine real use cases? because not all countries use the same product, so we will be difficult and can't even see the products used by other people out there, is there an easy way to see that?

[cahbagus555]

Liquidity illustrates investor interest and I think liquidity is an important factor that needs to be considered before deciding to invest. Coins or tokens that do not have liquidity will make it difficult for investors when they want to sell because it will result in prices falling deeper

[Gheka]

I agree that before deciding to invest, we see liquidity in the coins or tokens that we want to invest. Liquidity illustrates how actively the coin or token is traded and if the liquidity or transaction volume is large, investors can withdraw their investment at any time without worrying that no one will buy it

Of course, to increase flexibility and not to freeze capital in the market, checking the liquidity of a project will be a necessity when easy liquidity conditions will make us feel secure as you say but don't just look at the liquidity to make the investment decision, let's incorporate the analysis and information we get because pitfalls can appear at these parameters. The whales can control the game and create fake liquidity in a short time, so at least before investing, we should look at that project more and understand the amplitude of oscillation, price range will be able to move

[Kunnu]

Absolutely an enlightening topic. Before investing money in a particular coin/token It's really necessary to understand about the liquidity of that coin, there are many cryto traders who don't pay attention on this point and yes mostly of them are newbies they just need be aware and I think this topic is good example to make them aware.

[thiscomm]

in addition to liquidity before investing it would be nice to check the whitepaper or the steps that the coin will do, this might be for new coins. then for old coins in my opinion the popularity will greatly affect their liquidity like BTC. so when they already have popularity I'm sure they most likely have high liquidity.

[Ashong Salonga]

It seems like altcoin is having a good pump lately, many of the shitcoin has started to gain 100%  
That's good and bad both to be honest. For them who have invested a lot of money in 2018 ATH, it's good for them but for newbie, this shitcoin may be destructive to your crypto journey unless you become very smart while investing.

One term I would like you to introduce is- "Liquidity"

I don't want to go in details here since the goal is to make you alert about low liquidity.

Liquidity is simple term refers to liquid your crypto asset into fiat or it can be BTC too. Since, most of the times we trade with BTC, I will go with BTC here.

High liquidity- You can sell your coin anytime as much coin you want, the market has enough buyer to buy your coin.
Low liquidity- There are no enough buyer to buy your coin.

You can check this easily in exchange. Just visit the market for a coin and check the buy and sell orders and the amount. If there are low buy orders despite a high sell order, this means you can barely liquidate your coins there.

SO, when you are going to invest in a coin, check the liquidity of that coin for a certain period. Otherwise, don't invest. Also, before depositing big amount in exchanges, check if there has enough buyer at your desired price to buy your coin. Scam exchange can attract you by pumping a certain coin in their exchange and once someone deposits a big amount, they scam.

The altcoin market is more complex then you can ever think of. There are thousands of ways of scamming you which you can never imagine, even after being scam, you can't realize that it was a scam. Before invest, be smart enough to learn the tactics and save yourself.

Doing thorough research and observant will always be the key to be able not to get scammed and assure that the investment you will be safe with the assurance that it would grow into a desirable price you do want to have. Checking the liquidity of a certain coin in a right and legible exchange is really indeed a good help and point to always check with if you do want to liquidate your asset into Bitcoin or even other sort of cryptocurrencies. But as what I can observe, most people whenever doing trades mostly chooses to get into Bitcoin trading to be able to obtain Bitcoin. Checking the buy and sell order in an exchange will be a good help for you to decide whenever you want to liquidate your assets and help you to get into deciding if you will wait or get into trading your asset. Always check if the price movement in an exchange is legible because there are some cases that there is a glitch in the system wherein the shown price is too high but does not reflect in the market order.

Well indeed that Altcoin is more complicated other than the way we perceive or see it because there are lots of complications that happens within the Altcoin market so best thing is to be always observant to be able not to get scammed when doing important transactions with Altcoins. Also always remember to only invest amount you can afford to loose and not to always go all in.

[Kelvinid]

in addition to liquidity before investing it would be nice to check the whitepaper or the steps that the coin will do, this might be for new coins. then for old coins in my opinion the popularity will greatly affect their liquidity like BTC. so when they already have popularity I'm sure they most likely have high liquidity.

It seems to be helpful to check its whitepaper or the focus of this project if it is new but if we planning to invest in those coins that are already been existed for a while, it is very important to look its liquidity. This could help to identify if this coin has a better future or not.

For the safety and profit assurance, it is better to consider those coins that are listed in known exchanges and having a huge market volume. There is no need to waste time searching for another one coz you can't find any promising coin on the bottom list.

[Kasabus]

Absolutely an enlightening topic. Before investing money in a particular coin/token It's really necessary to understand about the liquidity of that coin, there are many cryto traders who don't pay attention on this point and yes mostly of them are newbies they just need be aware and I think this topic is good example to make them aware.

Newbies are mostly not fully equipped with the knowledge on investing coins so they should not focus on altcoins because it's very risky to invest. Bitcoin has always a high liquidity no matter what the season so they should start investing in bitcoin where there are sure buyers rather than risking their money in altcoins wherein their future is still unknown.

[davidroux]

Absolutely an enlightening topic. Before investing money in a particular coin/token It's really necessary to understand about the liquidity of that coin, there are many cryto traders who don't pay attention on this point and yes mostly of them are newbies they just need be aware and I think this topic is good example to make them aware.

Newbies are mostly not fully equipped with the knowledge on investing coins so they should not focus on altcoins because it's very risky to invest. Bitcoin has always a high liquidity no matter what the season so they should start investing in bitcoin where there are sure buyers rather than risking their money in altcoins wherein their future is still unknown.

I think there will still be a lot of new investors choosing to invest in new coins because for them this is the fastest way to make money in this market. However, the risk is much higher if the coin does not have good liquidity and you will definitely can not sell when the market starts to turn red. In my opinion, should only invest in new coins at the top exchanges recommended by people.

[lobo13hf]

Absolutely an enlightening topic. Before investing money in a particular coin/token It's really necessary to understand about the liquidity of that coin, there are many cryto traders who don't pay attention on this point and yes mostly of them are newbies they just need be aware and I think this topic is good example to make them aware.

Newbies are mostly not fully equipped with the knowledge on investing coins so they should not focus on altcoins because it's very risky to invest. Bitcoin has always a high liquidity no matter what the season so they should start investing in bitcoin where there are sure buyers rather than risking their money in altcoins wherein their future is still unknown.

I think there will still be a lot of new investors choosing to invest in new coins because for them this is the fastest way to make money in this market. However, the risk is much higher if the coin does not have good liquidity and you will definitely can not sell when the market starts to turn red. In my opinion, should only invest in new coins at the top exchanges recommended by people.

That's right. Some times people are blaming if the new coin can't be trusted but that's actually no 100% true. We have a bunch of trusted coins who are still actively developing the project. Liquidity just like an insurance that makes us able to liquidate our money instantly. This is a very important part to choose an investment in crypto.