Liquidation Cascade vs Long Cascade

A self-reinforcing sequence of forced position closures in which one tier of liquidations drives price movement that triggers the next tier; the mechanism behind crypto's most extreme price crashes; most severe when open interest is high and leverage concentration is elevated.

A rapid price decline driven by the sequential forced liquidation of leveraged long positions; each tier of liquidations generates selling pressure that pushes price lower and triggers the next tier; most severe when open interest is high and a large liquidation cluster exists below current price.