Order Flow Getting Started Tutorial
Large-amount entrusted orders (main orders)
Liquidation Heatmap
Liquidation Map
Basic introduction to order flow
What is order flow?
Order Flow Getting Started Tutorial
Order flow
What is the long-short position accounts ratio?
Manual of contract data for newer
Risk management in contract trading
Commonly used indicators for contract data
Costs in cryptocurrency trading
What positive or negative funding rates means?
Arbitrage opportunities in the cryptocurrency market
What are terms mark price、last price and estimated liquidation price?
What determined funding rate?
Basis and premium
Liquidation and delivery
What are USDT contract and USD contract?
What difference between open interest and trading volume?
Differences between cryptocurrency perpetual contract trading and leverage trading
How to keep balance for price in perpetual contracts and spot?
What categories of cryptocurrency derivatives?
What are Golden Cross and Death Cross, and how are they used in trading?
What is liquidity
What is VWAP indicator and how to use it in cryptocurrency trading?
What is the RSI indicator, how to see overbought and oversold?
How to Read Order Book Data?
The Analysis and Trading Applications of Long-Short Position Ratio and Open Interest
The Significance and Application of Cryptocurrency Liquidation Data
How is funding rate calculated for cryptocurrency perpetual contracts?
How to interpret the open interest data of cryptocurrency contracts?
What is the purpose of the cryptocurrency funding rate?
What is Top trader account long/short ratio
What is exchange top trader positions long/short ratio
What is Bitcoin open interest?
What is perpetual contract funding rate?
What is BTC liquidation or what is cryptocurrency liquidation?

What is BTC liquidation or what is cryptocurrency liquidation?

In the field of cryptocurrency, "liquidation" refers to the phenomenon where a trader holding a leveraged position loses their investment due to significant price fluctuations. Leveraged trading involves using borrowed funds to engage in trading, which increases potential profits but also amplifies the risk of potential losses.

When traders use borrowed funds to purchase cryptocurrencies in leveraged trading, they are required to provide a certain amount of assets as collateral on the exchange. This collateral is typically represented as a ratio, such as 3x leverage, which means the trader only needs to provide one-third of the total trade value as collateral.

If the price of the cryptocurrency declines and reaches a predetermined liquidation price set by the exchange, the exchange will automatically force liquidate the trader's position to prevent default on the debt. This process is known as "liquidation." During a liquidation, the trader's collateral is sold to offset the debt they are unable to repay.

Liquidation is a common risk in the cryptocurrency market, especially during periods of high price volatility. Therefore, traders need to exercise caution when engaging in leveraged trading and understand their risk tolerance to avoid potential losses.

Information content does not constitute investment advice, investors should make independent decisions and bear their own risks