Long positions wiped out refers to the forced closure of buy orders in financial markets due to significant price declines. This event typically occurs when the asset’s value drops below a certain liquidation threshold, especially in leveraged trading. Traders holding long positions face substantial losses, as their collateral becomes insufficient to cover the position. Such liquidations can accelerate downward price movements.
Context
In cryptocurrency markets, large-scale liquidations of long positions are a frequent occurrence during sharp market corrections, often amplifying volatility. News reports highlight these events as indicators of market capitulation and excessive leverage. Analysts track liquidation volumes to gauge market sentiment and identify potential price bottoms following rapid price depreciation.
The crypto market experienced a sharp downturn as over $2 billion in leveraged positions were liquidated, causing Bitcoin and Ethereum prices to fall significantly.
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