Liquidity in assets refers to the formlessness of price Fluctuations. Price moves like water, from prices (areas on your chart) where it is deemed to be expensive back to where price is considered cheap, IE -> Supply and Demand.

Regardless of what the actual price of your Asset/instrument is, the only important note is your y-axis -> price fluctuations.

Even without knowing the price or percentage change, being able to look at the above chart you can see how it flows from areas which are lower in the chart (cheap) versus those that are higher on your chart (expensive).

It’s all about building that understanding of the general narrative. To help do that you ask yourself three very simple questions:

• Where did price come from?

• Where is price right now?

• Where is price most likely going to?