How Is Liquidation Price Calculated in Crypto Futures?

Your liquidation price is the price at which your futures position has lost so much that the margin left falls to the exchange's maintenance margin, and the exchange closes it for you. For an isolated-margin long, a simplified formula is: liquidation price ≈ entry price × (1 − 1/leverage + maintenance margin rate). At 10x leverage and a 0.5% maintenance margin, a long opened at 85,000 USDT is liquidated at about 76,925 USDT, a fall of about 9.5%. Exact formulas vary by exchange, margin mode, fees and position size.

The terms you need

• Position value (notional): quantity × price. 0.1 BTC at 85,000 USDT = 8,500 USDT.
• Initial margin: what you put up to open it. At 10x leverage, 8,500 ÷ 10 = 850 USDT.
• Maintenance margin: the minimum margin the exchange requires to keep the position open, set as a percentage of position value. Larger positions usually face higher rates.
• Margin mode: isolated (only this position's margin is at risk) or cross (your whole futures wallet can be used). Our guide to leverage in crypto trading explains both.

Worked example: a 10x long on bitcoin

You go long 0.1 BTC at 85,000 USDT with 10x leverage in isolated mode. Assume a maintenance margin rate of 0.5% and ignore fees for now. (BTC was about $84,900 on 27 September 2026; see the live price, $83,030.68, or bitcoin in INR.)

1. Position value: 0.1 × 85,000 = 8,500 USDT.
2. Initial margin: 8,500 ÷ 10 = 850 USDT.
3. Maintenance margin: 0.5% × 8,500 = 42.5 USDT.
4. Loss you can absorb before liquidation: 850 − 42.5 = 807.5 USDT.
5. Price fall that causes that loss: 807.5 ÷ 0.1 BTC = 8,075 USDT.
6. Liquidation price: 85,000 − 8,075 = 76,925 USDT, a fall of 9.5%.

The shortcut formula gives the same answer: 85,000 × (1 − 0.10 + 0.005) = 85,000 × 0.905 = 76,925.

Short positions work the other way

For an isolated short, the simplified formula is entry × (1 + 1/leverage − maintenance margin rate). A 10x short at 85,000 with 0.5% maintenance margin is liquidated at 85,000 × 1.095 = 93,075 USDT, a rise of 9.5%. Check: the loss at 93,075 is 0.1 × 8,075 = 807.5 USDT, leaving 42.5 USDT, exactly the maintenance margin.

Liquidation price by leverage

Same long, entry 85,000 USDT, 0.5% maintenance margin, fees ignored:

Leverage	Margin for 0.1 BTC	Liquidation price (USDT)	Fall that liquidates you
2x	4,250	42,925	49.5%
5x	1,700	68,425	19.5%
10x	850	76,925	9.5%
20x	425	81,175	4.5%
50x	170	83,725	1.5%
100x	85	84,575	0.5%

Bitcoin can move 1.5% in an hour on an ordinary day, and altcoins far more. At 50x or 100x, normal noise is enough to wipe out the margin. That is why most of our risk management guidance starts with low leverage.

A rupee view

Some Indian platforms let you post margin in INR while the contract is priced in USD or USDT. The maths is the same; only the currency of your margin changes. In the 10x example, 850 USDT of margin is roughly ₹81,400 at USD/INR of 95.82, and the ₹77,400 or so above maintenance margin is what a 9.5% fall wipes out. If the platform converts margin at a fixed or live rate, check how that is shown in your app.

What moves your liquidation price closer

• Trading fees: opening and closing fees are taken from margin on many platforms, and some include the estimated closing fee in the liquidation calculation.
• Funding payments: if you pay funding every interval, your margin shrinks and liquidation creeps closer.
• Tiered maintenance margin: bigger positions face higher maintenance rates.
• Mark price, not last price: most exchanges liquidate based on a mark price derived from spot indices, to avoid liquidations on a single odd trade. The mark price can differ from the last traded price you see.
• Cross margin: other losing positions drain the same pool, so liquidation depends on your whole account.

Adding margin to an isolated position pushes the liquidation price further away; reducing the position size does the same.

What happens when you are liquidated

The exchange's risk engine takes over and closes the position. In isolated mode, you typically lose the margin on that position. Many exchanges also charge a liquidation fee or pass the remaining margin to an insurance fund. In a very fast market the close can happen at a worse price than the liquidation price, which is one reason exchanges keep insurance funds. You do not owe money beyond your margin on most retail platforms, but check the terms of yours.

How to avoid liquidation

1. Use low leverage, 2x to 3x, or trade spot. See spot vs futures.
2. Set a stop-loss well before the liquidation price, so you choose the exit, not the exchange.
3. Size positions so a stop-out costs 1% to 2% of your capital; our risk-first position sizing guide shows how.
4. Always read the liquidation price the app shows before confirming an order.
5. Keep an eye on funding and major news releases, which can move prices sharply.

FAQ

How do I calculate liquidation price for a long position?

A simplified isolated-margin formula is entry × (1 − 1/leverage + maintenance margin rate). For 10x at 85,000 with 0.5% maintenance margin, that is about 76,925. Your exchange's figure may differ because of fees and tiers.

At what percentage loss am I liquidated with 20x leverage?

Roughly 5% minus the maintenance margin rate, so about 4.5% with a 0.5% rate, before fees and funding.

Can I lose more than my margin?

In isolated mode on most retail platforms, your loss is limited to that position's margin plus fees. In cross mode, your whole futures balance is at risk.

Why was I liquidated before the price hit my liquidation level?

Exchanges usually use the mark price, not the last traded price, and fees or funding may have moved your liquidation level closer since you opened the trade.

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This article is AI-assisted, educational and general in nature. It is not financial advice and never a guarantee of profit. Every trade is at your own risk on your own exchange. See our risk disclosure and editorial policy.