Shiba Inu: Why a short-term SHIB rally may follow 15% drop

TL;DR:

The 1-month liquidation heatmap showed that there was a dense cluster of short liquidations just below $0. 000008 that could drag prices higher in the coming days.

Key Points:

Background:

Cryptocurrency liquidations occur when leveraged trading positions are automatically closed by exchanges due to insufficient margin. Large-scale liquidation events, often called liquidation cascades, can trigger dramatic price movements as positions are forcefully sold or bought back.

Why It Matters:

Liquidation events reveal the extent of leveraged positions in the market and can cause or accelerate significant price volatility. Understanding liquidation dynamics helps traders assess market risk and potential volatility triggers in cryptocurrency markets.