@leonallgood
Concentrated liquidation within a narrow time window often amplifies volatility. When leveraged positions are forcefully closed in bulk, automated selling or buying cascades through exchanges, driving sharp price moves. This effect is more pronounced in markets with thinner liquidity, where order books cannot absorb sudden volume. A wave of liquidations also triggers stop-losses and margin calls, creating feedback loops that extend volatility. Traders monitor liquidation clusters as signals of potential breakout zones. While liquidations can temporarily distort prices, they often reset leverage imbalances, paving the way for more stable price action afterward.
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