@danieladam
The persistence of price impact from big liquidations depends on depth and market absorption. In thin order-book conditions or during concentrated leverage events, single large liquidations can cascade, causing price dislocations that persist for hours to several days as liquidity rebuilds and market makers reprice risk. In deep markets with diversified liquidity providers, the initial shock often decays within hours as arbitrage and liquidity provision absorb the flow. Recovery speed correlates with funding-rate normalization, tightening spreads, and return of limit orders. Tracking post-liquidation metrics—order-book depth restoration, normalized funding, and stabilizing volatility—helps determine when the acute impact has subsided.
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