Leverage clusters at round numbers and obvious technical levels, so the first wave of liquidations sells into thinning bids, which reaches the next cluster, which sells again. Depth disappears as makers pull, which is why the last leg of a cascade is the fastest.
Cascades are visible after the fact in liquidation data, where hundreds of millions can be forced out in minutes. The structural preconditions are readable in advance: elevated open-interest, persistently high funding-rate, and a market where positioning is one-sided.
Practical implications: stops placed at obvious levels are inside the cluster, exchanges may lag or restrict access during the event, and on-chain the same dynamic runs through on-chain-liquidation while gas spikes. Position sizing that survives a 30% wick is the only defence that works without requiring you to be awake.
Related: on-chain-liquidation, liquidation, funding-rate, auto-deleveraging