Knowing the exact liquidation price before you click “open” is the difference between sizing a position intentionally and getting forcibly closed during the next funding wick. Liquidation is the exchange shutting your position to stop your losses from exceeding the margin you posted. The price at which that happens is not a mystery the exchange hides — it's a number you can compute up front. This guide gives you the formula, two worked examples, and the variables that quietly move the line against you.
What liquidation actually is
When you trade futures with leverage, you post a fraction of the position's value as margin. As price moves against you, your unrealised loss eats into that margin. The exchange requires you to keep a minimum slice of the position value as maintenance margin. The moment your equity falls to that threshold, the position is liquidated — closed at market, often with a liquidation fee on top.
So the liquidation price is the price at which your losses have consumed your margin down to the maintenance level. Everything below is mechanics.
The formula (isolated margin)
For an isolated-margin position — where only the margin you assigned to that trade is at risk — a good working approximation is:
Long liquidation price ≈ Entry × (1 − 1/Leverage + Maintenance Margin Rate)
Short liquidation price ≈ Entry × (1 + 1/Leverage − Maintenance Margin Rate)
The intuition: 1/Leverage is the fraction the price can move against you before your initial margin is gone. The maintenance margin rate (MMR) — typically 0.4%–1% for major pairs, higher for small or volatile ones — pulls the liquidation point slightly closer, because the exchange closes you before your margin hits zero, not at zero.
Cross-margin positions are more forgiving (your whole wallet backstops the trade) but harder to express in one line, because the liquidation price shifts as your other positions and balance change. The crypto leverage & liquidation calculator handles both modes for you; the formula above is the one to keep in your head.
Worked example: a long
Open a 10× long on BTC at $60,000, isolated margin, with a 0.5% maintenance margin rate:
- 1/Leverage = 1/10 = 0.10
- Long liq ≈ $60,000 × (1 − 0.10 + 0.005) = $60,000 × 0.905 = $54,300
So a roughly 9.5% move down wipes you out. Notice it's not a clean 10% — the maintenance margin rate ate half a percent of your cushion. At 20× the same trade liquidates around $57,150, a mere ~4.75% move. Leverage doesn't just multiply gains; it pulls the liquidation line uncomfortably close to your entry.
Worked example: a short
Open a 5× short on ETH at $3,000, 0.5% MMR:
- 1/Leverage = 1/5 = 0.20
- Short liq ≈ $3,000 × (1 + 0.20 − 0.005) = $3,000 × 1.195 = $3,585
A ~19.5% move up liquidates the short. Shorts get liquidated when price rises, longs when it falls — the formula's sign flips accordingly.
The variables that move the line against you
Maintenance margin rate scales with position size. Exchanges use tiered MMR: the bigger your notional, the higher the maintenance requirement, and the closer your liquidation price creeps. A size that's comfortable small can be dangerous large, even at the same leverage.
Funding payments erode isolated margin. On a perpetual, if you're paying funding (longs usually pay when funding is positive), each payment is deducted from your margin — which nudges your liquidation price closer over time even if spot price hasn't moved. Hold a position for days through adverse funding and your “safe” liquidation level slowly tightens.
Fees and the liquidation fee. Entry/exit fees and the liquidation penalty itself reduce the margin available to absorb losses. Real liquidation tends to trigger a touch earlier than the clean formula suggests.
Use it to size, not to gamble
The right way to use a liquidation price is backwards: decide the move you're willing to be wrong by, then choose the leverage that puts your liquidation beyond the noise. If BTC routinely swings 5% intraday and your 20× long liquidates at −4.75%, you're not trading a thesis — you're betting you won't get wicked out before you're right. Drop the leverage until the liquidation price sits outside the range you expect the market to chop through, and size accordingly. Pair this with the ROI / return calculator to check whether the position's realistic upside actually justifies the liquidation risk you're taking.
See the distance live, on every position
Computing the liquidation price once is easy. The hard part is keeping it in view across multiple open positions while price, margin, and funding all move. Meetcrypt shows liquidation distance as both a percentage and a dollar figure on every open futures position, colour-coded so danger is visible before the position is — and it logs liquidation-proximity events so you can review near-misses after the fact. Connect Binance or Bitget read-only and the distance updates automatically, or see how the risk monitoring works first.
Educational information only — not financial advice. Leverage trading carries a high risk of loss.