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How to Calculate Crypto Liquidation Price Before Opening a Leveraged Trade

Crypto liquidation prices depend on the exchange, contract, margin mode, maintenance tier and fees. Learn how to estimate one and what the result cannot guarantee.
From TheFinanceBase Team4 min to read

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There is no single liquidation-price formula that works for every crypto trade. To estimate the price before you open a position, identify the exchange, contract type, direction, margin mode, maintenance-margin tier and fee assumptions, then use that venue’s current formula or calculator. Treat the result as an estimate: account conditions and the exchange’s mark-price trigger can change when liquidation occurs.

How do I calculate my liquidation price before opening a leveraged trade?

Start with the exact contract and account setup you intend to trade. A linear USDT- or USDC-margined contract does not use the same calculation as an inverse coin-margined contract, and a long does not use the same formula as a short. Exchange formulas can also include maintenance-margin tiers, fees and extra margin.

  1. Identify the contract and direction. Record whether it is linear or inverse, the settlement currency, and whether you plan to go long or short.
  2. Choose the margin mode. Determine whether the position will use isolated or cross margin; they rely on different collateral assumptions.
  3. Gather the inputs. Note the entry price, position size or notional, leverage or allocated initial margin, any extra margin, maintenance-margin rate and deduction, and applicable fee assumptions. For cross margin, also account for relevant balance, unrealized profit or loss, and other positions.
  4. Find the applicable maintenance tier. Match the position’s notional to the exchange’s current tier table. If the estimated liquidation price changes the notional enough to put the position in a different tier, recalculate using that tier.
  5. Use the exchange’s current formula or calculator. Enter the same contract, direction, margin mode and assumptions you plan to use. Compare the result with the liquidation estimate shown in the order-entry screen or position preview.
  6. Check the trigger price and account state. Confirm whether the exchange triggers liquidation using mark price, and review the estimate again if your balance, positions or margin allocation changes.

Do not substitute a formula from another exchange or contract type. Bybit publishes different rules for contract and position configurations; Binance provides a futures calculator and describes tier-based maintenance margin. Their documentation and order-entry estimate are the relevant checks for positions on those venues.

What does the liquidation formula look like?

Bybit’s isolated linear long example

For an isolated linear USDT perpetual, Bybit publishes this long-side formula in its Unified Trading Account rules:

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Liquidation Price (Long) = [(Entry Price × Position Size) − (Entry Price × Position Size ÷ Leverage) − (Extra Margin Added ÷ (1 − Taker Fee Rate)) − MM Deduction] ÷ [Position Size − (Position Size × MM Rate)]

Here, the maintenance-margin rate and deduction must match the applicable risk-limit tier. This is Bybit’s formula for the specified setup, not a universal crypto formula. Bybit’s short-side equation changes the signs and fee treatment, so do not adapt the long equation by guesswork.

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Bybit’s stated worked example

Bybit’s documented illustration uses a 1 BTC long entered at 40,000 USDT with 50× leverage, 3,000 USDT of extra margin, a 0.5% maintenance-margin rate and a 0.0550% taker fee. Under those assumptions, Bybit states a liquidation price of 36,380.25 USDT. That result belongs to the stated Bybit example; it is not a general estimate for a BTC trade with similar leverage.

Why the formula changes

Inverse contracts use contract quantity and value relationships that differ from linear contracts, so a linear formula cannot simply be reused. Phemex publishes separate formulas for linear and inverse contracts and for long and short positions. Maintenance requirements may also rise with notional: Binance says the tier used in its calculation must correspond to the position notional, which can require recalculation if the estimated price implies a different tier.

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How do isolated and cross margin change the estimate?

Margin mode What collateral the estimate depends on What can change it How to interpret the displayed price
Isolated The margin allocated to the position, including any extra margin, plus the exchange’s maintenance requirements and applicable fee assumptions. Changing allocated or extra margin, position size, fee assumptions, or maintenance tier can change the estimate. Bybit’s formula includes these kinds of inputs. A position-specific estimate under the stated exchange rules and inputs.
Cross Shared account collateral. Depending on the venue, balance, unrealized P&L and maintenance requirements for other positions may matter; Binance’s USDⓈ-M explanation includes cross-wallet balance and other-contract maintenance margin. Account equity, unrealized P&L and other positions can change as the account changes. KuCoin’s Help Center, in a page dated July 22, 2026, says its displayed cross-margin liquidation price is a reference, not the basis for liquidation; it says liquidation occurs when the risk rate reaches 100%.

Adding margin to an isolated position can move its liquidation estimate farther from entry, all else held constant. Cross-margin estimates are more dependent on account conditions, so a displayed price should not be treated as fixed.

Which price triggers liquidation?

Bybit and Binance state that liquidation is triggered by mark price, not necessarily the last traded price. Bybit Help Center puts it this way: “Liquidation is triggered by the Mark Price, not the Last Traded Price (LTP).” A chart showing last price alone therefore cannot establish whether the liquidation threshold was reached.

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Fast markets can also make the realized event differ from a previously calculated threshold. Binance warns that volatility can cause the mark price at liquidation to differ from a prior estimate and describes staged liquidation procedures. Bybit notes that closing-fee effects can cause small differences from its calculated price.

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Does a liquidation-price estimate tell me the odds of liquidation?

No. It estimates a threshold under specified assumptions; it does not tell you how likely the market is to reach it. A 2021 paper, Liquidation, Leverage and Optimal Margin in Bitcoin Futures Markets, analyzed BitMEX Bitcoin perpetual-futures data and reported daily average forced-liquidation percentages of 3.51% for long positions and 1.89% for short positions in its sample. Those historical, sample-specific observations are not current probabilities for other exchanges or an individual trade.

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Before placing an order, use the exchange’s current contract rules, maintenance-tier table, fee schedule and calculator, then check the order-entry estimate against the intended settings. Even with matching inputs, a calculation is a planning aid rather than a guarantee of the price or process at which a position will be reduced or closed.

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