The ease in which a trader can quickly buy or sell an asset without impacting its price.
The number of buyers and sellers that are readily available to trade an asset or the total amount of cash or crypto being exchanged between buyers and sellers are both good indicators of how liquid the asset is.
Assets that have low liquidity often lead to high slippage (the difference between the expected price of an order and the price where the order actually executes) when buying or selling the asset.