$DOGE ｜$641,000 in long liquidations
Before discussing capital flows, let’s first understand liquidations.
A large number of liquidated long positions add selling pressure, while a large number of liquidated short positions add buying pressure. This is what makes cascading liquidations amplify volatility.
The term “long squeeze” refers to a price drop triggering liquidations of long positions, whose forced selling pushes prices down further. A “short squeeze” occurs when rising prices trigger liquidations of short positions, and covering those positions drives prices even higher.
The same data can mean very different things in different market conditions, so don’t apply any single rule mechanically.
Before discussing capital flows, let’s first understand liquidations.
A large number of liquidated long positions add selling pressure, while a large number of liquidated short positions add buying pressure. This is what makes cascading liquidations amplify volatility.
The term “long squeeze” refers to a price drop triggering liquidations of long positions, whose forced selling pushes prices down further. A “short squeeze” occurs when rising prices trigger liquidations of short positions, and covering those positions drives prices even higher.
The same data can mean very different things in different market conditions, so don’t apply any single rule mechanically.
