You're question raises the very issue around what might be the Achilles heel of bitcoin. You asked
This is the crux of the matter. If you want a real answer to this then I suggest trading real bitcoin with a real bitcoin wallet. What I mean by this is not a wallet with a company or exchange like coinbase, but rather a personal wallet such as electrum or one on your mobile phone. Then buy bitcoin through any exchange and transfer this to your wallet. It is the digital equivalent of taking your cash out the ATM. See how long this takes. Experimentally one could buy €10 or $10 of real BTC.
During busy periods especially when bitcoin is falling, you might be unfortunate enough to experience what is termed "congestion". This is when an unusually large number of transactions are all taking place at the same time. I trade real world money and bitcoin for a side project through the Localbitcoin website. When the last mild congestion happened a week ago, I had to wait just under 24 hours for one transaction to process, in the real world, I had to wait 24 hours to send bitcoin from one wallet to another to clear funds. While this was happening the bitcoin was falling. Some others had to wait nearly 2 days!
Now, Imagine you are managing a large bitcoin exchange, exchanging tens of millions of Euros every day and clearing them immediately for your customers. Now, imagine a situation where the bitcoin is falling and everyone starts selling all at the same time causing a "congestion" issue. Imagine you now have 48 hours of bitcoin that you are waiting to sell, but a large amount of your customers have already sold their bitcoin in your exchange and have issued a withdrawal. Your exchange coould be losing out on millions each day due to this congestion in clearing. Imagine a situation where news gets leaked that the exchanges are having a multi million Euro / Dollar / Yuan liquidity crises caused by congestion , now everyone starts panic selling their bitcoin and trying to simultaneously withdraw real cash. I can extrapolate that the situation can spiral out of control as the network traffic continues to climb while prices fall as people panic because the programming of bitcoin is hardwired in such a way as to slow down as the traffic increases. In fact this has been sighted as one of the original plans and designs... to keep a lid on run away prices.
I'm not saying bitcoin prices will fall now, however I am raising a possible issue as to what could cause the end of the meteoric rise of bitcoin. It has to do with the fundamental structure of bitcoin and this is the reason for all the fork attempts of the programmers. Be careful out there people, I believe when the bitcoin falls we will witness a large amount of companies collapsing due to the congestion problem. So the answer to the question of liquidity in bitcoin, the answer is yes, when things are ideal and, No, not at all when things are bad.