Declining Interest in Bitcoin-Margined Futures Promises Lesser Price Volatility — CoinDesk


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