Just saw: in this round of volatility in the $BTC perpetual contract, a long position worth $1.22 million was liquidated.
People always ask what liquidation means, and this is how I understand it.
Maintenance margin refers to the minimum margin required to keep a position from being forcibly liquidated; the larger the notional value of the position, the higher the required ratio is generally.
The often-mentioned “long squeeze” refers to a drop triggering long liquidations, with the resulting sell orders pushing prices even lower; “short squeeze” refers to a rise triggering short liquidations, with buybacks pushing prices even higher.
Don’t change your plan because of a single indicator, and don’t use borrowed money to test some reading.
#BTC
People always ask what liquidation means, and this is how I understand it.
Maintenance margin refers to the minimum margin required to keep a position from being forcibly liquidated; the larger the notional value of the position, the higher the required ratio is generally.
The often-mentioned “long squeeze” refers to a drop triggering long liquidations, with the resulting sell orders pushing prices even lower; “short squeeze” refers to a rise triggering short liquidations, with buybacks pushing prices even higher.
Don’t change your plan because of a single indicator, and don’t use borrowed money to test some reading.
#BTC