Yes. Illiquid markets are prone to low trading volumes, which are unlikely to attract speculative traders or convince new exchanges to list your token. Since buyers and sellers cannot trade at efficient prices, they are unlikely to interact; therefore, no trades are consummated and no volume is conducted.

This creates a cascading effect. Centralized exchanges that have already listed will delist tokens showing persistently poor liquidity and low activity due to the negative user experience they create. On the decentralized side, low volume means minimal swap fees, which makes it difficult to attract liquidity providers since the yield generated is insufficient to justify the capital commitment and impermanent loss risk. Liquidity providers will allocate to pools where fee revenue compensates for the risk that price divergence between paired assets erodes their position value.