Suppose one trader opens a long position at 108,000, and another opens a short position at the same price. The liquidation price for the long is 106,000, and for the short, it's 110,000.

Now, imagine the market is bullish—prices are trending upward. When the price reaches 108,800, the long trader decides to exit, locking in some profit. However, the price continues to climb toward 110,000. Why?

Because in a bullish market, bulls take profits as the price rises. There’s little to no resistance from below, and no significant pressure above. That’s because the "pressure" is actually on the bears (those with short positions), not the bulls. There’s no force actively pushing the price upward—the movement is driven by the liquidation or stop-loss triggers of the short positions.

When the price approaches 110,000, and short positions start getting liquidated, the funds from those liquidations are partially used to compensate the long traders who were in profit. The rest typically goes to the exchange as fees.

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