What Is a Liquidation Price in Crypto?

What a liquidation price is, how leverage moves it closer to your entry, and how to calculate it before you open a position.

Liquidation price calculator →

What it is

Your liquidation price is the price at which an exchange force-closes your leveraged position because your margin can no longer cover the loss. Cross it and you lose your margin. Knowing it before you enter is the single most important number in leveraged trading.

How leverage moves it

The higher your leverage, the closer the liquidation price sits to your entry. At 5× a long is liquidated on roughly a 20% drop; at 100× it is roughly a 1% move. That is why high leverage is so fragile — an ordinary wick can wipe a position.

How it is calculated

For an isolated long, liquidation ≈ entry × (1 − 1/leverage + maintenance-margin rate); shorts flip the sign. The exact figure depends on the exchange's maintenance margin and fees, so confirm it with a liquidation calculator for your coin and leverage.

Give it room

Set your size and leverage so the liquidation price sits beyond the noise — past obvious support and resistance and recent wicks — not on top of your entry. See also how to avoid liquidation.

FAQ

How is liquidation price calculated?

Roughly, liquidation ≈ entry × (1 − 1/leverage + maintenance margin) for a long, with shorts reversed. The precise value depends on the maintenance-margin rate and fees of the exchange.

Does higher leverage mean a closer liquidation price?

Yes. At 100× the liquidation price is only about 1% from entry, while at 5× it is closer to 20% — higher leverage leaves almost no room for price to move against you.

For information only — not financial advice. Explore the live data on the markets hub.