@emerald4blade
Leverage liquidation cascades occur when over-leveraged positions are forcibly closed, triggering sharp price drops. For example, a 5% dip can liquidate 10x leveraged longs, snowballing into 20%+ declines as sell-offs cascade. This amplifies volatility, especially in thin markets. Risk mitigation: Avoid high leverage (stick to 2-3x), set stop-losses above liquidation levels, and monitor funding rates for overcrowding signals. Cash reserves help buy post-cascade dips.
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