How to Calculate Liquidation Price in Crypto (Formula + Examples)
Your liquidation price is the price at which your exchange forcibly closes a leveraged position because your margin can no longer cover the loss. Knowing it before you enter — not after — is the difference between a controlled trade and a blown account. This guide gives you the exact formula, three worked examples, and a free calculator.
The liquidation price formula (isolated margin)
For an isolated-margin futures position, the estimated liquidation price is:
Short: Liq = Entry × (1 + 1/Leverage − MMR)
Where Entry is your entry price, Leverage is your leverage multiple, and MMR is the maintenance margin rate — a small percentage (often 0.4%–1%) the exchange requires you to keep. The higher your leverage, the closer liquidation sits to your entry.
Worked example 1 — 10× long on Bitcoin
You go long BTC at $60,000 with 10× leverage and a maintenance margin rate of 0.5%:
A roughly 9.5% drop wipes out the position. That's the real cost of 10× leverage — your stop-loss has to live well inside that range.
Worked example 2 — 20× short
Now you short at $60,000 with 20× leverage, same 0.5% MMR:
At 20×, a mere 4.5% rally liquidates the short. For a short, liquidation is above your entry.
Worked example 3 — why 100× is so dangerous
At 100× leverage, 1/Leverage is just 0.01, so liquidation lands about 1% away from entry. Ordinary market noise will close you out. This is why experienced traders rarely use extreme leverage — the liquidation buffer is razor-thin.
Plug in your entry, leverage and direction and get your liquidation price instantly — for longs and shorts, isolated or cross.
Open the liquidation calculator →What the simple formula leaves out
Real liquidation also depends on trading fees, funding payments, and your exchange's tiered maintenance margin (the rate rises as your position grows). Treat the formula as a conservative estimate and always keep a buffer between your stop-loss and your liquidation price. The safest habit is to size positions by risk — which we cover in the position sizing guide.
Frequently asked questions
What is the liquidation price formula?
For isolated margin: Entry × (1 − 1/Leverage + MMR) for a long and Entry × (1 + 1/Leverage − MMR) for a short.
At what percentage am I liquidated?
Roughly 1/Leverage minus the maintenance margin. 10× ≈ 9–10%, 25× ≈ 4%, 100× ≈ 1%.
Does a stop-loss prevent liquidation?
Yes — if your stop-loss triggers before price reaches your liquidation level, you exit on your terms with a smaller, controlled loss. Always set your stop inside the liquidation price.