What is the liquidation price in cryptocurrency trading?

3 answers

• Burcu YıldızJun 03, 2025 · 5 months ago
  The liquidation price in cryptocurrency trading refers to the price at which a trader's position is automatically closed by the exchange to prevent further losses. When the price of a cryptocurrency reaches a certain level, known as the liquidation price, the exchange will liquidate the trader's position by selling their assets. This is done to protect both the trader and the exchange from excessive losses. It is important for traders to be aware of their liquidation price to avoid losing all their funds in a trade.
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• Code.J6Aug 13, 2024 · a year ago
  Liquidation price is like a safety net in cryptocurrency trading. It's the price level at which your position gets automatically closed if the market moves against you. It's important because it helps prevent catastrophic losses and ensures that traders don't end up owing more than they have. So, always keep an eye on your liquidation price and set stop-loss orders to protect your investments.
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• TatendaJan 31, 2022 · 4 years ago
  BYDFi, a leading cryptocurrency exchange, implements a sophisticated liquidation system to protect its users. When a trader's position reaches the liquidation price, BYDFi will automatically close the position and sell the assets to cover the losses. This feature ensures that traders can trade with confidence, knowing that their positions will be automatically managed to prevent excessive losses. It's just one of the many ways BYDFi prioritizes user safety and security.
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