Total liquidations have topped $280 million in 12 hours on June 5 as crypto market sentiment has turned more fearful. Here are the most important things to know about this development:
1. Liquidations refer to the process of closing out a leveraged position in the market when the price moves against the trader’s position. This is done automatically by the exchange to prevent further losses.
2. The recent liquidations were triggered by a sharp drop in the prices of major cryptocurrencies such as Bitcoin and Ethereum. This has led to increased fear and uncertainty among traders, causing them to close out their positions.
3. The total liquidations of $280 million in just 12 hours is a significant amount, indicating the extent of the market downturn. It also highlights the risks involved in trading cryptocurrencies, especially when using leverage.
In summary, the recent liquidations in the crypto market serve as a reminder of the volatility and risks involved in trading cryptocurrencies. Traders should exercise caution and manage their risks carefully to avoid significant losses.