Crypto Liquidation
In cryptocurrency trading, crypto liquidation refers to the automatic and forced closure of a trader's leveraged position by an exchange. This occurs when the market moves against the trader's bet and their losses consume their account collateral, causing it to fall below the required maintenance margin. [1, 2, 3]
Because futures and margin trading involve borrowed money, exchanges execute liquidations to protect themselves from losing their own funds and to ensure they can pay out winning trades. Liquidations do not apply to spot trading, where you fully own the underlying crypto asset. [1, 2]
$NEAR
$YOU.US
$AAPLB
#CryptoLiquidity
#cryptouniverseofficial
#CryptocurrencyWealth
In cryptocurrency trading, crypto liquidation refers to the automatic and forced closure of a trader's leveraged position by an exchange. This occurs when the market moves against the trader's bet and their losses consume their account collateral, causing it to fall below the required maintenance margin. [1, 2, 3]
Because futures and margin trading involve borrowed money, exchanges execute liquidations to protect themselves from losing their own funds and to ensure they can pay out winning trades. Liquidations do not apply to spot trading, where you fully own the underlying crypto asset. [1, 2]
$NEAR
$YOU.US
$AAPLB
#CryptoLiquidity
#cryptouniverseofficial
#CryptocurrencyWealth