EXTERNAL SOURCE LIQUIDITY IN CRYPTOCURRENCY MARKET TRADING
Hello to everyone in this wonderful community today and on this great platform at large. I greet you all in good spirit and I want to believe that we all are doing just great today and if so we give God the praise for the sustenance of life and good health.
It is indeed the 27th of December which means we are still in the spirit of Christmas and I do hope that we all had a wonderful celebration in our various countries and homes as we celebrate the birth of Jesus together.
Today I decided to complete the teachings regarding liquidity in cryptocurrency market trading which I began few days ago and I feel it be nice and more explanatory to complete the teaching.
As we all know, we began this teaching and afterwards moved to talking about the internal liquidity in cryptocurrency market trading which we got to see how it works and all it entails but this teaching would not be complete if I do not discuss the external liquidity in cryptocurrency market trading and that is why I am taking out time to talk about it today.
So today we will be talking about the above topic which I have titled EXTERNAL LIQUIDITY IN CRYPTOCURRENCY MARKET TRADING. I believe after this discussion we will see how this works and what it entails regarding the cryptocurrency market trading and as such I urge you all to sit tight and take a chill pill as I begin the discussion for today. I wish you a happy reading!
In cryptocurrency market trading we understand that to every cryptocurrency assets there is liquidity to all and as such it almost in same proportion as though this liquidity is gotten or seen from an external market. It is important that we define the term external liquidity for more emphasis regarding the topic today.
WHAT IS EXTERNAL LIQUIDITY?
External liquidity in cryptocurrency market trading can be denoted as the presence of all individuals such as traders and investors in the cryptocurrency market that are either purchasing or demanding cryptocurrency assets in the cryptocurrency market from various exchanges.
External liquidity encompasses all liquidity from various sources, market and exchange platform. It is concerned with the various internal liquidity from various aspects and also all the activities regarding buying and selling of assets in the cryptocurrency market from various exchanges.
The external liquidity does not only deal with one particular exchange platform or source but all sources and it encompasses all activities such as the depth ratio, the trading volume regarding certain cryptocurrency assets that is seen outside a particular market.
The external liquidity solely represent the sum total of all liquidity in various exchanges and as such the higher the activities regarding cryptocurrency assets in the various sources or exchanges the greater the liquidity pool and thus creates a fast and easy execution of certain transactions be it a supply transaction or a demand transaction order which do not necessarily cause a noticeable impact such as asset price volatility because of the various activities by traders from different exchanges.
The external liquidity involves the presence of all the traders and investors that are performing certain activities in the cryptocurrency market and these activities is to provide liquidity through the combination of different exchanges platform regarding supply and demand of assets in the market as though the external liquidity denotes all the activities in different exchanges and not just a single exchang.
This is why it is advisable that before a trader performs or execute any activity in the cryptocurrency market exchang platform it is expedient to always take a gaze at the market and also the particular exchange you are about to execute your activities alongside to also look out the activities regarding the said asset outside the particular exchange which is considered to be the external liquidity.
This should be done in other to make trade simple and easier when purchasing or demanding an a particular asset in the cryptocurrency market and this also helps to make transactions easier without causing any negative impact to the price of the said asset that is to be traded.
Just as I have said earlier that the external liquidity stands to represent all other exchanges or sources through which transactions are performed regarding all cryptocurrency asset in the market and this deals with the liquidity that is readily available externally. It represent all the liquidity present in various exchanges in a general terms.
CONCLUSION
The price value of a given cryptocurrency asset is solely dependent on the external liquidity to stand firm or maintain a given price value because the external liquidity encompasses all the various sources of liquidity in certain exchanges and it makes supply and demand of cryptocurrency more easily done and this does not cause a strong effect on the price of the asset only when the trading volume regarding the said asset is high.
This means that they should be a higher number of traders and investors who are selling and at the same time purchasing the cryptocurrency asset to make a stable price value as the activities of supply is equivalent to the activities of demand.
Thank you all for taking your time to read from me today. I will be seeing you when next I am here but for now I bid you goodbye!
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The external liquidity in cryptocurrency market trading refers to the presence of all traders and investors across various exchanges purchasing or demanding cryptocurrency assets. It encompasses all activities outside of a particular market, ensuring a fast and easy execution of transactions without significant impact on asset price volatility. It is crucial for traders to consider external liquidity before executing any activities in the cryptocurrency market to simplify transactions and maintain stable asset prices.
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