Liquidation Skew vs Long Cascade

The distribution of open positions by price level, showing where the largest concentrations of forced-close triggers are located relative to current price; large clusters above current price represent potential short squeeze fuel; large clusters below represent potential long cascade triggers.

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.