Liquidation Data

In the wild world of crypto futures, liquidation happens when a trader’s position gets closed forcibly because they can’t meet the margin requirements (aka, they run out of funds to cover their trade). Think of it like the market saying, “Sorry, you’re out!” This usually happens when prices swing hard against a trader’s bet.

When total liquidation values spike, it often means the market’s overheated, either too bullish or too bearish. For example:

• A surge of long liquidations (bullish traders getting wiped out) during a price drop can signal the market’s hit a bottom, and a rebound might be coming.

• A wave of short liquidations (bearish traders losing out) during a price surge often triggers a “short squeeze,” pushing prices higher. But if liquidations are sky-high, it could mean the market’s overbought and nearing a top, so a pullback might be coming.