Liquidation price (crypto leverage)

The liquidation price is the mark price at which a leveraged crypto derivatives position no longer meets its maintenance margin, so the exchange closes it. Because maintenance margin is required, the liquidation price sits closer to the entry than the leverage alone suggests.

Senzoukria · Glossary · Updated September 2026

At a glance

Trigger (Binance)
Collateral < maintenance margin
Collateral
Initial collateral + realized P&L + unrealized P&L
Price used
Mark price, not last price
10x isolated long example
About 9.5% below entry at a 0.5% maintenance rate

The margin condition

Binance describes the trigger as collateral, the initial collateral plus realized and unrealized P&L, falling below the maintenance margin, with unrealized P&L and the liquidation price computed from the mark price. The maintenance margin is a percentage of the position's notional value that depends on the contract and on the position's size tier. The liquidation price is the mark price that makes collateral equal maintenance margin.

A worked example

An isolated long of 0.1 BTC at 60,000 USDT has a notional of 6,000 USDT. At 10x leverage, the initial margin is 600 USDT. Assume, for illustration, a maintenance margin rate of 0.5% of notional and ignore fees. Liquidation happens when 600 + 0.1 × (P − 60,000) = 0.005 × 0.1 × P, which gives P ≈ 54,271. The position is liquidated about 9.5% below entry, not 10%, because part of the margin must remain as maintenance margin. Real maintenance rates are published by each exchange per contract and size tier, and fees reduce the distance further.

What moves the liquidation price

  • Adding margin to an isolated position moves it away; removing margin moves it closer.
  • In cross margin mode, it depends on the whole account: losses or gains on other positions move it.
  • Funding payments change collateral and therefore the liquidation price over time.
  • Larger positions fall into higher maintenance tiers, which moves the liquidation price closer for the same leverage.
  • It is compared with the mark price, which can differ from the last traded price.

What happens at liquidation

Binance states that it first sends an immediate-or-cancel order to offload the position in the market and charges a liquidation clearance fee based on the notional value; its insurance fund page names these fees as a source of the fund. If the position cannot be closed before its losses exceed its collateral, it becomes a bankrupt position taken over by the insurance fund, and when the fund cannot absorb it, auto-deleveraging closes opposing profitable positions. Senzoukria does not hold or display crypto positions or liquidation levels; its crypto charts are for analysis only.

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Frequently asked questions

Why is my liquidation price closer than 100% divided by my leverage?
Because the exchange liquidates when collateral falls to the maintenance margin, not to zero. The maintenance requirement, plus fees, is kept aside, so the price only needs to move part of the way that 1 ÷ leverage suggests.
Does a stop-loss protect me from liquidation?
A stop placed well before the liquidation price usually closes the position first, but it triggers on the price type you selected and fills at market, so in a fast move it can slip. A stop beyond the liquidation price is never reached.

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