Liquidation data can be used to assess market risk (frequent liquidations indicate high volatility), predict price support/resistance levels (large long liquidations may form resistance, while short liquidation zones may form support), and analyze market sentiment (mass liquidations may trigger panic). It is important to consider differences in exchange rules and combine other indicators for comprehensive analysis.

"Liquidation may cause a large number of forced buy or sell orders to flood the market in the short term, increasing price volatility (e.g., cascading liquidations triggering a ""stampede""). However, it also provides liquidity opportunities for arbitrageurs. In the long run, frequent liquidations may weaken investor confidence, prompting exchanges to optimize risk control mechanisms to maintain market stability."

Traders can reduce the likelihood of liquidation by reasonably controlling leverage (avoiding excessive leverage), setting stop-loss orders to limit losses, monitoring margin levels in real time (ensuring maintenance margin remains above exchange thresholds), and diversifying investments to mitigate the risk of a single position. Additionally, traders should stay aware of market volatility and maintain sufficient margin buffers.