Stop-loss orders are automated instructions to sell a cryptocurrency when its price falls to a specified level. This type of order is placed with an exchange to limit potential losses on a trading position. Once the market price reaches the predetermined stop price, the stop-loss order becomes a market order and is executed at the best available price. It serves as a risk management tool to protect capital from significant downturns.
Context
The placement of stop-loss orders is a standard practice for managing risk in volatile cryptocurrency markets. Large clusters of stop-loss orders below key support levels can create cascading sell-offs if triggered, exacerbating price declines. Traders and analysts frequently discuss the strategic placement of these orders in relation to market structure and potential liquidation zones.
We use cookies to personalize content and marketing, and to analyze our traffic. This helps us maintain the quality of our free resources. manage your preferences below.
Detailed Cookie Preferences
This helps support our free resources through personalized marketing efforts and promotions.
Analytics cookies help us understand how visitors interact with our website, improving user experience and website performance.
Personalization cookies enable us to customize the content and features of our site based on your interactions, offering a more tailored experience.
