Check Liquidity Before you invest

[Mianae]

You're right. There are numerous coins now with no liquidity but heavy pumps daily. If you check the order book you will be surprised and wonder where the price was gained from. Please everyone liquidity is very important.

[flagpara]

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.

Liquidity is the main reason to dump after the bad market situation. During bearish market all coin price is dump but for low liquidity price will always dump. Although you are wrong about liquidity because liquidity and volume isn't same. Low liquidity coin can have high volume, you can follow the funds rise of this project.

[Swordsoffreedom]

if people buy coins with low liquidity can only be used for daily trading, we know that every day there must be a coin that fluctuates very drastically, then they take advantage of this situation when the coin is pumped and has a higher volume than usually.

~snip~
How could we make profits in day trading if ever the coin only has minimum buy orders?

He has to know that, It is always better to invest in a coin having high liquidity. For example, if you invest in a coin that has low liquidity, and someday in the future the price rises really high and you make a huge profit out of it, but there is barely any buyer to buy your coin. So in this situation, the profit you made comes to no good. On the contrary, if you invest in a highly liquid coin, even if you make a small profit, you can cash it out any given time. So it is always better to invest in coins having high liquidity.

[TrevorS]

Some exchanges even put notes on this kind of coins that have low liquidity so that users do not fall into the trap due to the coin's liquidity problem.
However, there are very few such exchanges.

I can only mention the Stelarport exchange with similar functionality.
In any case, the first thing that newcomers should understand while interacting with their assets is how liquidity works and what it is.

[Kiefner]

Investing in new coins can really be dangerous. I have been studying trading recently because it seems to me to be the best direction right now. If you trade bitcoins, or choose a well-known altcoin, then you will have more chances to increase your capital.

[kawetsriyanto]

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.

Well, you are right. Liquidity is very important to pick the right coin, not heading for the dead coins. It seems not too hard to find the coins with high liquidity. But, are there any other things that we must pay attention to when trading or buying some coins or tokens in the market? Of course, we must also see on what exchange it is listed, the volume, circulating supply, and also the total token supply. They will influence each other for real.

[jerrison]

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.

its a welcome advice both to the newbies and those who have existed in the space for a while but have limited information as regarding the liquidation of tokenised platforms most importantly exchanges that come up these days with so much promises and they don't consider liquidity to be the challenge facing the entire exchanger space of the technology.

[gundala]

its a welcome advice both to the newbies and those who have existed in the space for a while but have limited information as regarding the liquidation of tokenised platforms most importantly exchanges that come up these days with so much promises and they don't consider liquidity to be the challenge facing the entire exchanger space of the technology.

You are right, liquidity is one of the points that beginners must learn in order to adapt to the dynamic cryptocurrency market. If this basis is not owned, it will be very easily trapped in a market that leads to losses. One of the characteristics of exchange or coins or tokens that have low liquidity is the difference in price or gap that is too far apart, this should be watched out for.

[justdimin]

You have to check a lot more than just liquidity before you invest into anything, however if you are not checking liquidity you may fall for a coin that went up a lot but all due to there not being any competition.

Same happened with BSV very recently, it looked like it was the fourth biggest coin for a while and it still looks like a big coin however reality is the fact that there are thousands of dollars at most changing hands, all the other ones are fake and no proper place lists them at all. That happened to many altcoins I was involved actually, they are usually listed in some bad exchanges and they have such a low volume that owners all try to make a fake volume so it doesn't look like nobody cares, unfortunately that usually never works for them and the people who invested to them.

[Jannyh]

This is it. Liquidity is very essential  in the crypto world, if you go into investing  in a project without liquidity then know you are stocked already, before investing  or even trading check the volume  in the market for that particular  coin. Let's  open our eyes to the liquidity of crypto assets we want or wish to get in.

[SquallLeonhart]

Volume and liquidity are different things, there could be a lot of volume but there could be a lot less liquidity. Volume is when people buy and sell a coin which means it could be faked and people put up orders themselves and execute it themselves quickly enough without letting anyone else get in the way, that is at least what I know, that is why volume is quite important for many coins to realize if the amount of interest went up but when it comes to smaller coins volume means nothing since it could be faked.

However, liquidity is when people put up orders, so if you can sell 1 million dollars without changing the price too much that is a coin with good liquidity, if there isn't even 1 million dollars worth of orders even if you kill the market by selling all, that means there is no liquidity, that is the difference.

[ATSgrowth]

Those who are investing into low market cap coins are pure speculators and I believe that they know about this problem. But from top 100 coins you can't choose altcoin that Has low liquidity because exchanges fight to list them to earn free from trading  .

[adzino]

Yeah, this is what newbies exactly need to know! Even if the price goes high, but has low liquidity, then you won't be able to sell your coins because there is no one to buy your coins in the market. I wonder why you were saying that shitcoins getting pumped up by 100% is both good and bad. Shouldn't it be just a bad thing since poor naive investors are going to fall for it. Or are you saying its good because we can take advantage of the pump and make some profit?

[swivel1983@gmail.com]

I agree with your reasoning. Liquidity is very important for trading and for investing in coins. I always check the liquidity before buying.

[leowonderful]

Also consider the number of different exchanges with active trading pairs for the altcoins that you're looking to invest in. There's always the potential of price manipulation and/or a misrepresented price if the coin you want to invest in is only actively traded on one or two exchanges, and those exchanges might also have policies in place that push the price of the altcoin to where it is, such as the trading fees or the withdrawal fees on the exchange.

Exchanges go offline through hacks or even a simple exit scam very often too, not to mention some exchanges simply lose popularity and thus trading volume over time as well. You should also always remember to keep as much of your funds as possible off-exchange for security purposes.

[Perfect35]

There are times that the team ofcertain projects, in order to keep up with the price of their coin, at least at a certain range, try to by themselves provide enough liquidity of such exchange. With that liquid, The can easily place buy and sell order. So, they are ready to buy what you are coming to sell and at the same time, they are ready to sell to you.

[TrevorS]

Those who are investing into low market cap coins are pure speculators and I believe that they know about this problem. But from top 100 coins you can't choose altcoin that Has low liquidity because exchanges fight to list them to earn free from trading  .

Personally, I believe that the entire crypto market is speculative. Especially coins associated with IEO on large exchanges.
But I agree with you that the top coins at least have a decent level of liquidity that compensates for their speculative nature.
Alas, many people ignore this moment when they make decisions about investing in a particular coin.

[Synaesthesia]

I agree with your reasoning. Liquidity is very important for trading and for investing in coins. I always check the liquidity before buying.

If the coin has good liquidity, you will certainly be easier to trade and the trading volume will also greatly affect the performance of that coin. I think the market is risky and not all coins are stable for you to choose to trade. In fact, I only participate in exchanges with high liquidity like Binance because this is where there are many good projects.

[$crypto$]

Those who are investing into low market cap coins are pure speculators and I believe that they know about this problem. But from top 100 coins you can't choose altcoin that Has low liquidity because exchanges fight to list them to earn free from trading  .

Personally, I believe that the entire crypto market is speculative. Especially coins associated with IEO on large exchanges.
But I agree with you that the top coins at least have a decent level of liquidity that compensates for their speculative nature.
Alas, many people ignore this moment when they make decisions about investing in a particular coin.

Now with high liquidity, especially with a coin rate of 100 and above is the best coin because they have a large trade, meaning there are still many who believe in the coin.
IEO in large exchanges is always included in the top coin rankings and that has been happening a lot there now they continue to struggle to increase liquidity in the market to remain large in its trading volume.

[ufaiz50]

things like this that are often ignored by some people, about liquidity in a crypto. a few days ago one of the members created a thread that contained his frustration with altcoin and now is the year of shitcoin.
in the altcoin market many if the manipulation of prices, the token, to manipulate the token market is often the case and it can manipulate the level of liquidity. so be careful to invest or trade and use all aspects to see crypto.