GlossaryIntermediate
Exit Liquidity
A description for later buyers whose purchases effectively provide the liquidity that lets earlier holders sell out at a favorable price.
Exit liquidity describes later buyers in a rising market whose purchases effectively provide the liquidity that lets earlier holders — including, in a pump and dump (see Kaavon's "Pump and Dump" glossary definition), the scheme's own organizers — sell out at a favorable price.
Being "exit liquidity" for someone else is generally not something a buyer intends or realizes in the moment — it's a retrospective description of how a trade's outcome actually played out, specifically highlighting that one side's gain came directly from the other side's later loss, rather than from genuine, separate value creation.
Examples
- Buyers who enter near the top of a pump and dump scheme, right before organizers sell, are commonly described afterward as having been the exit liquidity.
- Being described as exit liquidity is a retrospective judgment about how a trade's outcome played out, not something a buyer typically recognizes in the moment.