Liquidity

In memecoins liquidity mostly means the contents of a liquidity pool (LP) on a DEX: a token pair such as a memecoin and SOL, or a memecoin and WETH. When you buy, you put SOL into the pool and take the memecoin out. When you sell, you do the reverse. The ratio of the two tokens in the pool sets the price.

The deeper the pool, the less your order moves the price. In a shallow pool even a small buy or sell shifts the rate sharply, and exiting a larger position can cost a large part of its value. Liquidity is a completely different number from market cap: a token valued at several million may hold only a fraction of that in its pool. Who can withdraw the liquidity matters too.