Liquidity
How quickly an asset can be sold for cash near its quoted price. A deep market absorbs a large order with little movement in price; a thin one does not.
Liquidity describes how easily you can get out, not how much what you hold is worth. A listed share and a house on a quiet street can be worth the same and behave nothing alike: the share sells in seconds at a price already on the screen, the house takes months and ends at a price nobody could have quoted in advance. Cash sits at one end of that range and is the reference point the whole idea is measured against.
Two different things travel under the name. Market liquidity is the property of an asset just described, read from trading volume, the bid-ask spread, and the depth of resting orders sitting on either side of the quote. Funding liquidity is the property of a person or a business: holding enough cash and near-cash to meet what falls due. The two are separate, and a company can be solvent on paper and still fail on funding liquidity in the same month. That is what a cash-flow crisis is.
The mistake is treating liquidity as a fixed property of an asset. It is a property of an asset at a given size and a given moment. A position that trades easily in ordinary amounts can be untradeable at ten times the size, and liquidity thins fastest in falling markets, when the largest number of holders want out at once. It is also why an emergency fund is normally held in instruments chosen for how fast they convert rather than for what they return.