Liquidation hunting is a strategy where large market players, or 'whales', manipulate cryptocurrency prices to provoke the liquidation of positions held by leveraged traders.
In 2025, with the volatility of Bitcoin exceeding $100,000, this practice became particularly noticeable. Whales create sharp price movements, pushing the market to levels where stop-losses or liquidation orders of margin traders are triggered, resulting in massive losses.
Traders with high leverage (10x and above) are particularly vulnerable. For example, data from May 2025 shows that liquidations in the derivatives market reached $2.5 billion in a week during a sudden 8% drop in BTC. This wipes out the deposits of small traders, while whales profit from volatility and exchange fees. Platforms like Binance and Bybit are increasing protections, but risks remain high.
To minimize losses, traders are advised to use low leverage, set reasonable stop-losses, and avoid trading during periods of high volatility. Awareness and discipline are key to surviving in the market.
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