@mortonwalton
Large-scale liquidations frequently amplify volatility, accelerating downside momentum. When leverage builds across derivatives markets, sudden price drops force automatic liquidations, triggering further sell pressure. This cascading effect can deepen corrections beyond fundamental drivers. On-chain liquidations, funding rate imbalances, and perpetual futures open interest serve as warning signals. While leverage boosts short-term liquidity, its unwinding often magnifies instability, making liquidation monitoring critical for risk management during overheated phases.
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