Auto-Deleveraging (ADL) has become a key topic as traders face widespread liquidations in the perpetual contracts market. ADL is a critical mechanism that maintains market balance when liquidity is scarce and insurance funds are depleted. It operates by closing profitable short positions, particularly the largest and most profitable, when long positions are liquidated without new capital inflow. Despite its controversial nature, ADL serves as a crucial safety measure to ensure market solvency during extreme conditions.
Auto-Deleveraging Mechanism Gains Attention Amid Massive Liquidations
Disclaimer: The content provided on Phemex News is for informational purposes only. We do not guarantee the quality, accuracy, or completeness of the information sourced from third-party articles. The content on this page does not constitute financial or investment advice. We strongly encourage you to conduct you own research and consult with a qualified financial advisor before making any investment decisions.