Understanding a Bitcoin liquidation map is imperative in dealing with the inherent volatility of the crypto market. The visual tool showcases probable liquidation levels, indicating where large orders may cause cascading price changes.
This post explores how to interpret a Bitcoin liquidation map, allowing you to trade smarter in the volatile world of cryptocurrency.
What is liquidation in crypto trading?
In cryptocurrency trading, liquidation happens when an exchange forcefully closes a trader’s leveraged position due to insufficient margin to pay losses. This usually occurs when the market moves sharply against the position.
Long liquidations occur when prices fall, affecting traders who bet on an uptrend. Short liquidations happen when prices unexpectedly rise, impacting those who bet on a decline.
Did you know? In crypto, a single liquidation cascade can wipe out millions in minutes, triggered not by hacking but