🥸🥸🥸 Understanding Liquidations in Crypto Trading 🥸🥸🥸

In leveraged trading, investors borrow funds to amplify their positions. If the market moves against their position beyond a certain threshold, the exchange automatically closes the position to prevent further losses—a process known as liquidation. This mechanism is crucial for maintaining market stability and protecting both traders and exchanges.

Current Market Dynamics

As of May 27, 2025, Bitcoin is trading around $109,165. Analysts have identified key price levels where significant liquidations could occur:

Below $106,000: A drop to this level could trigger approximately $434 million in long position liquidations across major centralized exchanges.

Above $110,000: An increase beyond this point may lead to around $361 million in short position liquidations.

These thresholds are critical as they represent clusters of leveraged positions that, if breached, could lead to cascading liquidations, intensifying market volatility.

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