What is liquidation in Crypto Futures trading?

Liquidation is the process where your position is automatically closed because your maintenance margin is not enough to cover losses in leveraged positions, or when the margin ratio reaches 100%. This is done to prevent losses greater than your initial capital.

The maintenance margin is calculated based on the following formula:

Maintenance Margin = (1 / leverage used / 4) x 100.

Please note that liquidation occurs when the Market Price in the application reaches the Liquidation Price. The Liquidation Price is influenced by the amount of available USDT margin and the unrealized gain from the current open position.