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22 Aug 2023

Derivatives liquidations behind the Thursday collapse

The collapse saw harsh and sudden volatility after a prolonged lull – in line with our warnings of stability breeding instability in crypto markets.
Liquidation Chart
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Derivatives liquidations drastically exaggerated the Thursday collapse. A rapid vicious cycle of forced selling in thin markets pushed prices lower, resulting in even more underwater trades entering liquidation. The collapse saw harsh and sudden volatility
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