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Cryptocurrency: high ball liquidity game
The cryptocurrency world has received significant attention in recent years as prices increase and collapse as always. However, in this rapid development market, there is a more complicated question: liquidity. In terms of cryptocurrencies, marginal calls can be a change of game and when they pay for payment, the consequences can be serious.
What are marginal called?
Marginal calls occur when the position of an investor in cryptocurrency is considered a very high or non -profit risk due to market variation. To manage this risk, traders use a leverage called Margin, allowing them to buy more borrowed money coins. As the price increases, the trader can “move” to his position, increasing his exposure and possibly gained a higher return. However, as the price decreases, they must fulfill the marginal order to cover their losses.
Liquidity Crisis: Disaster Revenue
The liquidity crisis occurs when there are not enough buyers or salespeople in the cryptocurrency market to avoid losses. This can happen when:
- The new project will start with a very high price goal, causing prices to increase and then collapse.
- A large investor has canceled his market ownership due to risks of instability or safety.
- Regulatory changes or state interventions lead to freeze real estate prices.
When liquidity dries, investors stay, looking at the gap. If they cannot respond to marginal calls, they may lose all the investment. This can happen even if they have a solid business plan and sufficient capital.
The consequences of unpaid marginal calls
The consequences of unpaid margins are serious:
* Liquidity losses : Investors may lose thousands or even millions of dollars in the short term.
* Marginal speech errors : The trader can be forced to move his position several times, increasing his exposure and increasing the risk of losses.
* Tax Impact : Free outstanding calls can lead to investor tax liabilities because they should report outpatient sales.
How to mitigate the marginal risk
Although there is no empty way to avoid marginal risks, traders can take several measures to relieve exposure:
* Your versatile portfolio : Apply investments to various cryptocurrencies and asset classes to reduce risks.
* DISPOSAL INTERRUPTION REQUESTS
: Set automatic sales orders when price drops below a certain level to limit any loss.
* Use commercial strategies with built security networks : Find traders who use strategies such as posture, market production or protection to reduce risks.
Best practices to manage marginal calls
Effective control of marginal calls:
* Carefully monitor your locations : Regularly check the value of stores and adjust the stop regulations as needed.
* Your versatile property
: Apply investments to various cryptocurrencies and asset classes.
* Use the effect of the lever wisely : Use only the margin to strengthen potential benefits, not to reduce losses.
Conclusion
Liquidity is a crucial part of any encryption market. As it dries, the consequences may be serious for investors who have not taken steps to control their exposure. Understanding the risks and implement proactive measures to mitigate them, traders can navigate the high contribution of cryptocurrencies in the world with confidence.
As the cryptocurrency scenario continues to develop, it is imperative for investors to remain alert and prepare for possible opportunities. With the right strategies and a solid understanding of marginal calls, you can minimize your risk and maximize your potential return on this rapid change market.
Responsibility exemption
This article does not intend to be an investment consultant. The cryptocurrency market is naturally volatile and subordinates significant risks.