How leverage can accelerate price moves.
| Concept | Explanation | |---|---| | Long liquidation | Forced closing of leveraged long positions after price declines. | | Short liquidation | Forced closing of leveraged short positions after price rises. | | Liquidation cascade | Forced closures intensify the move, triggering additional liquidations. | | Liquidation cluster | Price area where many leveraged positions may be vulnerable. | | Aftermath | Price can continue, stabilize, or reverse after leverage is cleared. |
Liquidation data describes forced activity, not fair value. Cascades can produce temporary dislocations and unusually fast moves.