A cascade starts as an ordinary liquidation. A leveraged position crosses its maintenance threshold and the venue closes it at market. That is routine and happens constantly.
It becomes a cascade when the market order moves price enough to push the next position over its own threshold. Now there are two forced sells, then four, and each one is price-insensitive: the liquidation engine is not trying to get a good fill, it is trying to close.
Why it accelerates
Two things compound. Leveraged positions cluster at round entry levels, so thresholds are not evenly distributed — they sit in bands. And market makers widen or step back as volatility spikes, so the same size moves price further than it did a minute ago.
The result is a move that looks violent relative to the actual amount of capital involved.
Where it stops
It stops when the forced flow meets unforced flow — a bid that is there because someone wants the asset at that price rather than because an engine is closing a position. In practice this is resting size at a level that was chosen deliberately.
That is why the depth map matters more during a cascade than at any other time. A thin book below means there is nothing to absorb it until much lower; a visible shelf of resting size means there is a floor and roughly where.
What the aftermath tells you
Open interest falls sharply, because positions were closed rather than transferred. Funding usually flips or collapses toward zero, because the crowded side has been removed. Both are measurable, and together they are the cleanest confirmation that the flush actually cleared positioning rather than just moving price.
If open interest did not fall, it was not a cascade. It was a move.