A veteran in the crypto space has warned that a small number of sellers can rapidly collapse the price of meme coins. This is due to the use of perpetual futures, which can amplify market volatility by forcing leveraged traders into liquidations as prices begin to drop. The rapid price swings can lead to a cascade effect, causing even more panic selling and further exacerbating the decline.
Source
"Meme Coin Volatility Amplified by Leverage" — CryptoPotato
This article is Bitcoincryptos' summary and analysis of reporting originally published by CryptoPotato. Read the full original report at the link above.
The warning highlights the risks associated with investing in highly speculative assets like meme coins.
