Short excerpt from a speaker explaining how high leverage and liquidations among inexperienced traders can paradoxically fuel upward Bitcoin price momentum: when leveraged short/sell positions are liquidated during a strong rally, forced buy orders add upward pressure and amplify the move.
There are a lot of people betting on this. When the price arrives there now, more and more people join a lot of inexperienced players that think, oh, wow, that is a move to do, you know, I want to sell. Because the price is going to correct. And they use crazy leverages like 100 and things like that 50. And when the price actually doesn't stop, because it has a very strong momentum up, they, their position get liquidated. So they are forced, instead of selling to buy, because if a price goes too high, they need to buy, they are forced to buy. And now all of a sudden, that gives even more fuel to the move up. And this is how the marketplace, this is exactly what happens. This is why a bunch of cells can actually create more buying by being liquidated.
