What Is the Relationship between a Coin’s Liquidity and Its Susceptibility to Price Manipulation?

Low liquidity makes a coin highly susceptible to price manipulation. With low liquidity, a large buy or sell order can move the market price dramatically because there are few standing orders to absorb the volume.

A 51% attacker can exploit this by shorting the coin before the attack, knowing the resulting instability and panic selling will cause a massive price drop, allowing them to profit from the short position.