Looking through the groups today, the people in tears mostly fit one profile: their leverage isn’t especially outrageous, but they’ve never calculated their own liquidation price.
Let’s run the numbers using today’s actual price action. According to CoinGecko, BTC’s high over the past 24 hours was about 73,090, its low was about 68,060, and it’s now around 69,270—a daily range of nearly 7%.
Suppose someone opened a long around 73,000:
1. At 20x isolated leverage, the margin is only 5% of the position. After accounting for maintenance margin, the liquidation price is roughly around 69,700. Today’s low was 68,000, so this position is already gone.
2. At 10x isolated leverage, the liquidation price is roughly around 66,000. They survived this wick, but unrealized losses have already eaten up more than half their margin, and they’re basically on the verge of a breakdown.
3. If you use cross margin, the liquidation price moves lower as your account balance increases, which looks safer. The trade-off is that if you can’t hold on, your entire futures account gets wiped out—not just this one position.
Maintenance margin rates vary slightly across tiers. The numbers are estimates, but the direction is right.
The mistakes I’ve made over the years have taught me a few habits:
- Before opening a position, check how far the liquidation price is from the current price. It should be at least a good bit farther away than the largest daily price swing in the past 7 days.
- Beginners should favor isolated margin. If one trade goes bust, stop there—don’t let one bad trade bring down your entire account.
- Set your stop-loss before the liquidation price. Better to get stopped out than wait for the system to close your position—liquidation also comes with an extra fee.
- When the market moves 7% in a day like it did today, proactively lower your leverage by one tier and reduce your position size. Being able to sleep soundly matters more than anything.
Leverage itself isn’t bad; leverage you haven’t done the math on is. Let’s talk: do you usually use cross or isolated margin for futures? Did today’s wick sweep you out?
The above is only my personal opinion and does not constitute investment advice. The market involves risks.