How Liquidation Price Works: Use an Approximation, Then Verify the Exchange
CryptoRebateHub Editorial Team
Liquidation depends on side, leverage, maintenance tiers, margin mode, fees, funding, mark price and venue rules. Simplified formulas are scenario estimates; there is no universal “safe leverage” or safety distance.
Direct answer: a simplified liquidation formula is useful for stress testing, but the venue's current liquidation/forced-close figure and rules are the execution reference. Maintenance margin is not one fixed number across all positions; size tiers, cross/isolated margin, funding, fees, mark price and deleveraging rules can all change the result.
Why a fixed 5x/10x/20x “safe leverage table” is misleading\nThe same leverage can carry very different risk across assets, margin modes, position sizes and volatility regimes. No fixed percentage distance is a safety guarantee. Treat stop, size, liquidation and tail-price scenarios as separate controls.
Practical check order\n1. Read the current maintenance margin, mark price and estimated liquidation line in the exchange order preview.
- Use the Liquidation Calculator as an independent scenario estimate, not a replacement for the venue.
- Use the Position Size Calculator to size from the maximum loss you are prepared to accept.
- Stress-test gaps, accumulated funding and deteriorating liquidity.
Liquidation clusters do not guarantee a “stop hunt”\nHeatmaps are estimates of leveraged-position concentrations, not proof that a price will be reached or deliberately hunted. Do not move a stop solely because of a heatmap.
Use verified cost inputs\nTrading fees, funding and any account benefit should come from the official account/ledger. This guide does not apply a fixed rebate percentage to leveraged-trading savings.
Educational only. Leveraged trading can produce rapid and larger-than-expected losses.
