The cryptocurrency market is full of innovation and volatility. In the past 24 hours, significant liquidations occurred, affecting digital assets.
What is Crypto Liquidation?
Crypto liquidation refers to the forced closure of a trader's leveraged position when their margin balance falls below the required level. This usually happens during significant adverse price movements.
Analysis of Liquidations in the Last 24 Hours
Recent events revealed the scale of liquidations in the cryptocurrency market. For example, Ethereum suffered liquidations totaling $132 million, with 71% from long positions. Bitcoin and Solana also experienced significant liquidations, highlighting the high risks in the market.
Causes of Crypto Liquidations
Liquidations often occur due to high volatility, excessive leverage usage, and the breach of key price levels. Major causes include rapid news events, macroeconomic changes, and large liquidation volumes that can trigger cascading effects in the market.
Recent liquidations highlight the importance of risk management and a deep understanding of market mechanics. Traders should account for volatility, use stop-losses, and manage their positions carefully.
