What is market liquidity?

Market liquidity is the extent to which a market allows for assets to be bought and sold at fair prices. These are the prices that are the closest to the intrinsic value of the assets. In this case, intrinsic value means that the lowest price a seller is willing to sell at (Ask) is close to the highest price a buyer is willing to buy at (Bid). The difference between these two values is called the bid-ask spread.