🛑 Achilles' Heel of Crypto.🤔🤔🤔
Why "Leverage" Kills the Market🥺🥺😭😭😭
Leverage is not just an additional risk. It is a ticking time bomb that turns ordinary volatility into a weapon of mass destruction and is, in essence, a self-inflicted wound on the crypto market.!!!!
As hype-eaters and KOLs (key opinion leaders) exit the stage while "gamblers" are leaving the market en masse, it is time to look at a much more serious problem. And again, the root of evil is greed and a "casino" mentality.
Leverage turns insignificant price movements into an avalanche of liquidations. When the price drops, forced selling of liquidated positions drives the price even lower, triggering a chain reaction and new liquidations. A self-reinforcing feedback loop arises.
In high-leverage markets, the price no longer reflects real supply and demand. It reflects the mechanics of liquidations. A movement of just 5% can wipe out billions of dollars in open interest.
Exchanges profit from this system. High leverage = more volume, more fees, more liquidations.
