Liquidations

A liquidation is a forced unwind. When a leveraged position can no longer meet its margin, it is closed automatically at market, regardless of the trader's intent. In a crowded market, liquidations matter because they feed on themselves: forced selling pushes price into the next band of stops, which triggers more liquidations, which pushes price further.

Why liquidation flow is a signal

Crowding tells you how fragile a market is. Liquidation flow tells you whether the fragility is starting to break. Tracking the size and side of forced unwinds across markets shows where pressure is actually being released right now, not just where it could be.

Read together, the two are complementary. A market that is highly crowded but showing little liquidation flow is loaded and quiet. A market that is crowded and beginning to show rising liquidations on the crowded side is the one where a cascade may be underway.

What intenthybrid AI tracks

The terminal tracks forced unwinds across perp markets, including their size and side, and presents them next to the crowding index for each market. Over a rolling window you can see how much has been liquidated and in which direction.

In the manager you might see an illustrative summary like 12 markets tracked, 48 million dollars liquidated over 24 hours. That figure is a sample of the shape of the data, a rolling liquidation total across the tracked set, not a live or guaranteed number.

The cascade, in plain terms

The danger in a crowded book is not the first liquidation, it is the chain. One forced unwind moves price enough to force the next, and in a heavily one-sided market that next position is likely on the same side, so the move accelerates. A flush is this chain running to the point where price reaches a level with enough resting liquidity to absorb it, often described as a support shelf. A risk read estimates roughly how much would clear before that point.