Monday January 24, 2022 - 15:38:13 GMT
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What Happens in Markets When Bubbles Burst?

When you see sharp falls in markets across the board it is often driven by selling winners to raise cash for margins calls to support losers. I heard someone say today one reason stocks are selling off is that the plunge in cryptos is spilling over to stocks, where selling is going on to raise cash for crypto margin calls.Whatever the case, these are liquidating markets as can be seen in oil and metals today where, for example, there are profits that can be booked to pay the piper elsewhere.Whatever the case, it is like a merry-go-round with selling spilling from one market to another, exacerbated by the need to raise cash for the reasons cited above.In forex, why are funding currencies, such as the EURUSD lagging>The answer is these currencies are beneficiaries of position squaring as can be seen in eurgbp (higher) and audjpy (lower) today.
This article was posted earlier on the AT Forum
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