Liquidation Cascades:

When large numbers of traders have their stop-losses or liquidation levels near the same price (e.g., a support or resistance level), a cascade effect can occur. This can trigger rapid price moves as positions are liquidated.

Benefit from the Liquidation Zones:

Short Squeeze: If a market is heavily short and the price rises quickly, liquidations of short positions can fuel further upward movement.

Long Squeeze: Conversely, if the market is long-heavy and price drops, liquidations of long positions can accelerate the downward trend.

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