In the dynamic world of cryptocurrency, liquidation of positions represents a significant event. In the last 24 hours, there was a widespread closure of trading positions, affecting substantial amounts.
What is Crypto Liquidation?
Crypto liquidation occurs when a trader's leveraged position can no longer meet margin requirements. When the market moves against a position and margin balance falls below a threshold, exchanges automatically close the position to prevent further losses.
Analysis of the Last 24 Hours of Liquidations
In the last 24 hours, many liquidations occurred in the crypto market, primarily affecting long positions:
| Cryptocurrency | Total Liquidated (24h) | Long Positions Liquidated (%) | | --- | --- | --- | | Ethereum (ETH) | $145.86 million | 58.63% | | Bitcoin (BTC) | $70.05 million | 79.99% | | XRP (XRP) | $48.68 million | 76.79% |
Causes and Effects of Massive Liquidations
Main causes of mass liquidations include: 1. Excessive Leverage 2. Market Volatility 3. Cascading Effects 4. Unforeseen Events
Mass liquidations have serious consequences, including increased volatility, market reset, and psychological impact on traders.
The recent mass liquidation serves as a reminder of the inherent risks and volatility present in the crypto market. Traders must understand liquidation mechanics and practice strict risk management.