Crypto Futures Liquidation: Unveiling the Shocking Truth Behind Market Crashes

Key Points

1. Crypto futures liquidation occurs when a trader's leveraged position is forcibly closed due to insufficient margin, often during high market volatility.

2. Recent data shows $102 million liquidated in one hour and $751 million over 24 hours, primarily affecting long positions during a market downturn.

3. Major exchanges like Binance, Bybit, and OKX saw significant liquidations, with Binance leading at ~$300 million in 24 hours.

4. Leverage amplifies both profits and losses, as illustrated by a hypothetical example where a 2% price drop can wipe out a trader's entire margin.

5. Traders can mitigate risks by using lower leverage, setting stop-loss orders, and maintaining adequate margin levels.