Definition ∞ Liquidation manipulation describes illicit market activities designed to force the liquidation of leveraged trading positions in cryptocurrency markets. Perpetrators achieve this by intentionally moving the price of an asset to trigger stop-loss orders or margin calls for other traders. This can involve wash trading, spoofing, or creating artificial trading volume to distort price discovery. The objective is to profit from the forced closure of positions, often at unfavorable prices for the liquidated parties.
Context ∞ News reports on liquidation manipulation often detail investigations into market misconduct on cryptocurrency exchanges. Such activities are a significant concern for market integrity and investor protection, particularly in highly leveraged derivatives markets. Regulatory bodies are increasingly scrutinizing these practices, with enforcement actions and calls for stricter oversight frequently appearing in financial news related to digital assets.
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