“$356 million in ETH liquidations” doesn’t mean people actually lost $356 million.
A CoinDesk report on October 9 said that about $356 million worth of ETH positions were liquidated over a 24-hour period.
That figure measures the size of positions that were forcibly closed, not the sum of everyone’s actual losses.
You can use margin to open a position larger than your collateral. If your margin isn’t enough to keep the position open, it may be liquidated. So the value of a position and the actual loss aren’t the same thing.
That doesn’t mean liquidations aren’t serious. It just means that when you see liquidation news, don’t let a big number sway you right away. I first check the time period covered, then whether the liquidated positions were long or short, rather than treating the figure as a bill for market losses.
When you’ve seen “liquidation volume” before, did you take it to mean money people actually lost?
A CoinDesk report on October 9 said that about $356 million worth of ETH positions were liquidated over a 24-hour period.
That figure measures the size of positions that were forcibly closed, not the sum of everyone’s actual losses.
You can use margin to open a position larger than your collateral. If your margin isn’t enough to keep the position open, it may be liquidated. So the value of a position and the actual loss aren’t the same thing.
That doesn’t mean liquidations aren’t serious. It just means that when you see liquidation news, don’t let a big number sway you right away. I first check the time period covered, then whether the liquidated positions were long or short, rather than treating the figure as a bill for market losses.
When you’ve seen “liquidation volume” before, did you take it to mean money people actually lost?