What is Liquidation cascade?

A liquidation cascade is a chain reaction where one forced position close pushes price into the next cluster of liquidation levels, triggering more forced closes and a violent, self-feeding move.

How to read it

Dense liquidation clusters are accelerants. Price entering a stacked zone with thin order-book depth is the recipe for a cascade.

FAQ

How fast are cascades?

Seconds. By the time the candle shows it, the order book had already thinned — which is why order flow gives the earliest warning.

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