Declining Curiosity in Bitcoin-Margined Futures Guarantees Lesser Worth Volatility — CoinDesk

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A dealer primarily takes a loss on each the collateral and the futures contract. Thus, margin necessities enhance at a sooner price with value declines, and longs get liquidated comparatively rapidly. That, in flip, places additional downward stress in the marketplace, resulting in a deeper slide, often known as leverage washouts, just like the one seen in Might. Lengthy liquidation refers to compelled closure (compelled promoting) of bullish positions attributable to margin scarcity.

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