"Liquidation: When the Market Says ‘Nope!’" 🚀
Liquidation just means turning assets into cash — but in trading, it usually means someone’s getting wrecked.
There are 3 main types:
1️⃣ Forced Liquidation (Ouch! 💥)
Happens in leverage trading (futures, margin, perpetuals).
If the price moves against you too much, the exchange force-sells your position to stop further losses.
Two kinds:
Long liquidations → You bet price will go up, but it drops.
Short liquidations → You bet price will go down, but it pumps.
2️⃣ Voluntary Liquidation (Cash Out 😎)
You choose to sell your assets for cash or another coin.
Example: Selling BTC into USDT to take profit or buy something else.
3️⃣ Business/Fund Liquidation (Bye-Bye Company 🪦)
A company shuts down and sells all assets to pay debts.
Example: FTX dumping $1B in crypto to pay creditors.
📌 Quick Recap Table:
Type What It Means Vibe
Forced Exchange closes your losing trade 😭 Pain
Voluntary You sell by choice 😎 Chill
Business Company sells all assets 🪦 End game
