leverage trading continuous to wrack traders
Insufficient traded fund while trading a particular crypto asset opened position leads to liquidation on a leveraged trade
The crypto space has been a life game-changer for many, although there are high risks involved with holding, buying, and selling crypto as volatility and market uncertainties are factors that can not be controlled in the cryptocurrency world, while most investors prefer to spot trade their traded coins which include buying and holding for a medium or long term, other prefer a riskier means of earning which involves betting their bought position on either contract trades, margin and, future trades that involve high reward and higher risk of losing total savings.
Leveraged trading has been associated with lots of risks and could render users/institutions go bankrupt, the chance of getting a high turnover in profit can be equated to losses involved, with proper risk management the risk of losing all assets can be tackled by a proper application of market stop loss
Bitcoin traders liquidated roughly $12 billion in levered positions last week as the price of the cryptocurrency spiraled, according to bybt.com
According to coinglass.com over 40k traders, assets got liquidated in the last 24hrs.
Billions of dollars have been amounted to liquidation in 2021 due to traders opening large positions in the market, although with higher leverage comes better reward, greed and, FOMO has been driving a factor that propels traders to bet on large leverage positions which in the most case turns sideways due to market volatility.
There are centralized crypto exchange that offers their users 100-1x trading position in leveraged trades a trader gets margin trades where they are allowed to merge their trading account this will boost their limits calls to extend their trading position.
The excessive use of this leveraged position has forced several traders to close/sell their traded position when the market is highly volatile, failure to close this opened position can lead to asset liquidation in most cases these have left most traders with no penny as liquidation leads to total loss of trading funds.
With proper risk management liquidation on leveraged trades can be minimized if traders would avoid the use of excessively leveraged positions when trading
In a nutshell
Without volatility, the crypto market will be less fun I guess which also means leverage trading can be of advantage if properly implemented and used in the crypto space.