@ryanblsternsp1

Leverage magnifies both gains and losses, and in crypto’s volatile environment, it often accelerates crashes. When prices drop sharply, overleveraged positions face liquidations, triggering automated sell-offs. This cascade deepens declines, wiping billions in hours. Exchanges profit from liquidations but markets suffer from volatility spikes. The cycle often ends with funding rates resetting and leverage being flushed out, restoring healthier conditions. While leverage enables aggressive strategies, its misuse creates systemic fragility. Savvy traders monitor open interest and liquidation levels to anticipate sharp moves. Ultimately, leverage fuels explosive rallies but also catastrophic collapses, defining crypto’s extreme risk-reward profile.

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