Crypto Liquidation: What It Is and How to Avoid It!

Crypto liquidation happens when a trader's position is automatically closed due to insufficient margin. This typically occurs in leveraged trading when market movements go against the trade.

High leverage – Small price drops can wipe out positions

Market volatility – Sudden swings trigger stop-loss orders

Insufficient margin – Not enough funds to cover losses

Use Stop-Loss Orders – Automatically exit before big losses

Lower Leverage – Avoid extreme risk on volatile assets

Maintain a Healthy Margin – Keep extra funds in your account

Diversify Your Portfolio – Don’t put all your funds in one trade