📚 Why does a price drop trigger liquidations? Understand the liquidation cascade
The market taught leveraged traders another lesson today: around $1.19 billion in positions were liquidated across the crypto market over the past 24 hours, with more than $1 billion of that in long positions. $BTC is currently around $82,326, down 0.5% over 24 hours; $ETH is around $2,492, down 2.9%, while BNB and Solana fell even more.
Many beginners look only at price movements and overlook how liquidations work: leverage magnifies your position, and losses eat into your margin first. The further prices fall, the more likely exchanges are to close positions at market price. The resulting selling pressure pushes prices even lower, creating a cascade of “drop → liquidation → further drop.” ETH’s liquidations even exceeded BTC’s this time because leverage had built up more heavily in ETH beforehand.
Remember these three rules to protect yourself:
1) The lower your leverage, the better. Calculate your liquidation price before opening a position;
2) Keep the risk on any single trade to a small portion of your total funds. Don’t go all in;
3) In choppy markets, keeping cash on hand matters more than chasing a direction.
BTC is now down more than 5% for the week, and ETH has fallen below the $2,500 level. In the short term, watch whether support near $79,700 holds. Don’t add leverage to average down when sentiment is at its worst.
When you use leverage, do you check the liquidation price first or the target price? Share your risk-management habits in the comments 👇
#币圈教学 #风险管理 #比特币 #Ethereum
⚠️ Personal opinion only. DYOR and be aware of the risks.
The market taught leveraged traders another lesson today: around $1.19 billion in positions were liquidated across the crypto market over the past 24 hours, with more than $1 billion of that in long positions. $BTC is currently around $82,326, down 0.5% over 24 hours; $ETH is around $2,492, down 2.9%, while BNB and Solana fell even more.
Many beginners look only at price movements and overlook how liquidations work: leverage magnifies your position, and losses eat into your margin first. The further prices fall, the more likely exchanges are to close positions at market price. The resulting selling pressure pushes prices even lower, creating a cascade of “drop → liquidation → further drop.” ETH’s liquidations even exceeded BTC’s this time because leverage had built up more heavily in ETH beforehand.
Remember these three rules to protect yourself:
1) The lower your leverage, the better. Calculate your liquidation price before opening a position;
2) Keep the risk on any single trade to a small portion of your total funds. Don’t go all in;
3) In choppy markets, keeping cash on hand matters more than chasing a direction.
BTC is now down more than 5% for the week, and ETH has fallen below the $2,500 level. In the short term, watch whether support near $79,700 holds. Don’t add leverage to average down when sentiment is at its worst.
When you use leverage, do you check the liquidation price first or the target price? Share your risk-management habits in the comments 👇
#币圈教学 #风险管理 #比特币 #Ethereum
⚠️ Personal opinion only. DYOR and be aware of the risks.