Liquidation Cascade

A self-feeding burst of forced closures, where each liquidation pushes price into the next cluster.

A cascade is not a big candle, it is a feedback loop. One forced closure sells into the book, the print drags price into the next band of liquidation levels, those positions get closed too, and the loop repeats until the clusters run out. That is why a cascade shows up as a burst of forced-closure notional in a short window rather than a smooth trend. Our detector reads the real liquidation tape in 30 minute buckets and flags a bucket when its total forced closures exceed the larger of 30 million USD and six times the trailing median bucket, so the bar moves with market conditions instead of being a fixed number that stops meaning anything in a quiet month. Every flagged burst is filed with its notional, long and short split, the coins swept and the price path.

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Other terms

Funding Rate
Periodic payment between perpetual futures longs and shorts that keeps the contr...
Open Interest
Total notional value of all open futures positions at a given moment....
Basis
Price gap between a futures contract and its underlying spot index....
Mark Price
The exchange's fair-value price for a perpetual, derived from the spot index plu...
Liquidation
Forced closure of a leveraged position when its margin is exhausted....
Profit Factor
Ratio of gross winning trades to gross losing trades. Above 1 means the strategy...

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