A quick note: during this round of volatility in the $ETH perpetual contract, a $3.06 million long position was liquidated around 1864.67.
People often ask how to interpret liquidations. Here’s how I see it.
When prices swing sharply, liquidations tend to happen in clusters: one batch of positions gets closed, pushing the price further, which triggers the next batch.
“Long squeeze” refers to falling prices triggering long liquidations, whose sell orders push prices lower; a “short squeeze” is when rising prices trigger short liquidations, and the buybacks push prices higher.
With leveraged positions, first consider whether you can withstand the worst-case scenario, then think about what the signals are saying.
#ETH
People often ask how to interpret liquidations. Here’s how I see it.
When prices swing sharply, liquidations tend to happen in clusters: one batch of positions gets closed, pushing the price further, which triggers the next batch.
“Long squeeze” refers to falling prices triggering long liquidations, whose sell orders push prices lower; a “short squeeze” is when rising prices trigger short liquidations, and the buybacks push prices higher.
With leveraged positions, first consider whether you can withstand the worst-case scenario, then think about what the signals are saying.
#ETH
