On the evening of August 2nd, Bitcoin suddenly fell below the $112,000 mark, with a total liquidation amount of $369 million across the network within just 24 hours, forcing over 110,000 investor accounts to be liquidated. Almost at the same time, Ethereum plummeted 6% to $3,494, and the total market capitalization of crypto assets evaporated by 6.9%, with a total liquidation amount exceeding $1 billion. Behind this "capital strangulation war" is the cruel reality of countless high-leverage traders having their accounts wiped out - and the culprit of it all is Get Liquidated.
What is Get Liquidated? The Fatal Mechanism of Forced Liquidation
Get Liquidated, a professional term referred to as Liquidation, refers to the process in Margin Trading where, due to severe market price fluctuations, the trader’s margin falls below the minimum requirement to maintain the position, resulting in the forced sale of the position by the exchange. Simply put, when trading coins with borrowed money (leverage), if the losses reach a critical point, the system automatically "cuts the position" to prevent you from owing money to the platform.
Assuming an investor puts in 10,000 USDT as capital and uses 10x Margin Trading to go long on Bitcoin, it is equivalent to controlling a position of 100,000 USDT. If Bitcoin price If the price drops by 10%, the position loss will reach 10,000 USDT (total loss of principal). At this time, if the margin is not replenished, the exchange will forcibly liquidate the position, and the investor’s principal will instantly become zero.
The key point is: getting liquidated does not necessarily mean a "total loss." If the loss does not exceed the margin, only part of the principal is lost; however, if the account is liquidated (loss exceeds the margin), some platforms may even pursue the repayment of the debt.
Why Do Get Liquidated? Four Fatal Inducements
- The Deadly Temptation of High Leverage: The leverage multiple directly determines risk resistance capability. When using 50x leverage, a mere 2% adverse market fluctuation can trigger Get Liquidated; under 100x leverage, a 1% fluctuation is enough to be fatal.
- Margin management out of control: when prices fluctuate inversely and the account equity falls below the maintenance margin rate without replenishing positions, the system automatically liquidates. During the ETH crash in August, the preset "hunting trap" in the $3600-$3700 range directly triggered $179 million in long positions, which is a typical example of the collapse of the margin defense line.
- Extreme Market "Pin": The crypto assets market is highly volatile. On August 2nd, Bitcoin’s flash crash (over 3% drop in 8 hours) and Ethereum’s "cliff-like plunge" are both classic "pin" market scenarios characterized by rapid price collapses, making it extremely difficult to escape high margin trading positions.
- No Stop Loss Gambler’s Mentality: In the ETH crash event in July 2025, 93% of the Get Liquidated orders came from long positions without stop loss. When greed overwhelms risk control, getting liquidated becomes almost an inevitable outcome.
Real Market Bloodbath: 2025 August Get Liquidated Storm Panorama
- Bitcoin Liquidation Chain: On August 3, BTC fell to $114,116, triggering a total liquidation of $760 million across the network. Binance’s open contracts plummeted by 4%, with net position volume dropping to -$160 million (driven by aggressive selling pressure), indicating that bulls were systematically cleaned out.
- ETH Longs’ Nightmare: Ethereum Plummets 6% to $3494 in 8 Hours, Technicals Break Below Ascending Channel’s Lower Bound at $3625, -DI Line in DMI Indicator Surges to 30.4, Bears Completely Take Control.
- Altcoin massacre scene: When mainstream coins plummet, the altcoins with worse liquidity become the hardest hit. Dogecoin has accumulated a 19% drop over 7 days, and XRP’s long-to-short ratio reached 93% : 7% in liquidation imbalance, with bulls almost "wiped out".
Ironically, when retail investors panic sell, whales and institutions are frantically bottom-fishing: on July 31, a single day, on-chain whale addresses transferred out $900 million worth of ETH from exchanges; the Trump Media & Technology Group, counter to the trend, hoarded $2 billion in Bitcoin, becoming one of the publicly traded companies with the most coins in the world.
Five Survival Rules: How to Avoid Getting Liquidated?
- Strict control of leverage: Beginners are advised to use ≤ 3 times leverage. If using 5 times leverage, a 20% market reverse fluctuation is required to Get Liquidated; while only a 10% fluctuation is needed for forced liquidation with 10 times leverage. The lower the leverage, the greater the margin for error.
- Unconditional Stop Loss Setting: Pre-set stop loss points when opening a position (e.g., automatically exit at a loss of 5%). In August’s altcoin volatility, portfolios that strictly executed stop loss strategies still achieved a total return of 114%, as the gains from profitable coins offset the losses from stop losses.
- Real-time Margin Monitoring: When the margin rate falls below the safety threshold (which varies by exchange), immediately add margin or reduce position. Avoid full position operations and reserve more than 20% of liquid funds to cope with fluctuations.
- Enable Isolated Margin Mode: In this mode, the liquidation of a single position does not affect the other funds in the account. In Cross Margin mode, once liquidated, it may affect all assets.
- Make good use of the Get Liquidated heatmap tool: Monitor the liquidation map through platforms like Coinglass to avoid "Get Liquidated dense areas" (for example, ETH had a large accumulation of long stop-loss lines around 3600-3700 USD), as these areas are highly susceptible to targeted hunting.
Final Words: Respect the Market to Survive
Getting liquidated is not a "black swan" event, but an inevitable result of market volatility resonating with human greed. According to Coinglass statistics, the total amount of liquidations due to improper leverage usage exceeded $250 million in July 2025, affecting over 93,000 people. The bloodbath in early August further confirmed: in the crypto world, risk management is always more important than chasing high profits.
When whales calmly consume bloodied chips during a crash, retail investors’ dreams of margin trading turn into numbers on liquidation orders—this is not only a game of capital but also a touchstone for risk awareness. Only by viewing leverage as a sword rather than a crutch, and weaving stop-losses into armor, can one safeguard their territory amidst the bloody storm of the crypto world.
