A note: During this bout of volatility in the $BTC perpetual contract, a short position worth $1.03 million was liquidated.
People often ask what liquidation means. This is how I understand it:
The higher the leverage, the closer the liquidation price is to the entry price. The price doesn’t need to move much for a position to be liquidated.
When liquidations happen across the board, rather than guessing whether prices will rise or fall next, it’s better to first check how close your position is to its liquidation price.
Extreme readings often come with greater volatility. At times like these, it’s even more important to reduce leverage instead of adding to your position.
#BTC
This is for record-keeping and sharing only, not investment advice.
People often ask what liquidation means. This is how I understand it:
The higher the leverage, the closer the liquidation price is to the entry price. The price doesn’t need to move much for a position to be liquidated.
When liquidations happen across the board, rather than guessing whether prices will rise or fall next, it’s better to first check how close your position is to its liquidation price.
Extreme readings often come with greater volatility. At times like these, it’s even more important to reduce leverage instead of adding to your position.
#BTC
This is for record-keeping and sharing only, not investment advice.