A Price Volatility Trigger is a predefined threshold or condition based on asset price fluctuations that initiates an automated action within a trading system or protocol. These actions can include automatic liquidations or the activation of circuit breakers. It serves as an automated risk control.
Context
Price volatility triggers are integral to risk management strategies in cryptocurrency trading and decentralized finance protocols. News often covers instances where these triggers activate, leading to automated liquidations or temporary trading halts, particularly during extreme market movements. This highlights their role in preventing cascading failures and maintaining market stability.
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