Massive Crypto Perpetual Futures Liquidation: A Crucial Market Update

Key Points

1. Perpetual futures are derivative contracts without an expiry date, offering flexibility but also high risk due to leverage.

2. A crypto liquidation occurs when a trader's margin falls below the required maintenance level, triggering automatic closure to prevent further losses.

3. The past 24 hours saw substantial long liquidations, indicating significant market volatility.

4. High leverage combined with market volatility is the primary cause of liquidations in perpetual futures trading.

5. Large liquidations can trigger a cascading effect, leading to further price swings in the cryptocurrency market.