A short transcript excerpt from a YouTube video discussing how market liquidity is continuously absorbed and how leverage magnitudes affect the speed and scale of market moves — higher leverage (e.g., 25x) compresses moves into a narrow range, while lower leverage (e.g., 3x–10x) produces larger moves and takes longer for liquidity to be purged from the system.
The market is taking all the liquidity at all times. It's just when you're talking about 25x, you're talking in a very small range. Then when you talk about 10x, it gets bigger. Then, you know, 5x gets bigger and then 3x gets bigger than that. So it's taking all the liquidity all the time. It just takes, the less leverage, the longer it takes to purge it out of the system.
