How to deal with Bybit liquidation unfairly?

Bybit liquidates positions when the mark price hits your liquidation level, not the last traded price—check mark price history to verify if the trigger was valid.

Aug 01, 2025 at 07:22 am

Understanding What Triggers a Bybit Liquidation

When trading perpetual contracts on Bybit, liquidation occurs when a trader’s margin balance falls below the maintenance margin required to keep a leveraged position open. This typically happens during sharp price movements against the trader’s position. The platform automatically closes the position to prevent further losses beyond the available equity. It's essential to understand that liquidation is not arbitrary—it follows predefined risk parameters based on leverage, entry price, mark price, and funding rates.

Each contract has a liquidation price, which is displayed in real time on your position panel. If the mark price reaches this level, the system triggers the liquidation mechanism. The use of mark price instead of last traded price prevents manipulation and ensures fairness. Some traders may feel liquidated unfairly when price spikes occur, but these are often due to market volatility rather than platform error.

How Bybit Calculates Liquidation Price

To assess whether a liquidation was justified, you must know how Bybit computes the liquidation price for both long and short positions. For a long position, the formula considers entry price, leverage, fees, and funding costs. For example:

• A higher leverage reduces the distance between entry price and liquidation price.
• The initial margin and maintenance margin ratio play critical roles.
• Fees such as taker fee (0.1%) and funding payments are factored into break-even calculations.

You can verify your liquidation price using the calculator tool available under the trade interface. Navigate to “Contract” > “BTCUSD” (or any pair) > locate “Liquidation Price” beneath your active position. Compare this value with the historical mark price chart during the liquidation event. If the mark price touched or passed your liquidation threshold, the execution was protocol-compliant.

Checking Mark Price vs. Last Traded Price Discrepancies

One common source of perceived unfairness is confusion between last traded price and mark price. Bybit uses mark price to determine liquidations to avoid price manipulation during volatile conditions. The mark price is derived from major spot exchanges like Binance, Coinbase, and Kraken, weighted by volume and smoothed using a time-based average.

If you observe that the last traded price on Bybit didn’t reach your liquidation level but you were still liquidated, check the mark price history. You can access this data via:

• The "Market" tab on the trading interface
• Selecting “Mark Price” overlay on the price chart
• Using third-party tools like TradingView with Bybit mark price feeds

Discrepancies between last price and mark price are normal during flash crashes or rapid slippage events. The system will liquidate based on mark price crossing the threshold, even if order book prices differ momentarily.

Reviewing Insurance Fund and Auto-Deleveraging (ADL) Status

After liquidation, the system attempts to close the position through a bankruptcy price calculation. If the market cannot fill the order at a better price than bankruptcy, the loss is absorbed by the insurance fund. However, in extreme cases where the insurance fund is insufficient, Auto-Deleveraging (ADL) may activate.

ADL allows profitable counterparties to be force-closed to settle losing positions. Check your notification center or email for alerts about ADL involvement. You can also review the ADL queue ranking in the Positions section. High-ranked opposing positions get prioritized during deleveraging.

If your liquidation triggered ADL, it indicates severe market illiquidity. While uncomfortable, this process maintains platform solvency. Review whether your position size relative to market depth contributed to systemic impact. Large positions inherently carry higher ADL risk.

Steps to Take If You Believe Liquidation Was Unfair

Should you suspect technical malfunction or unjust liquidation, follow these steps immediately:

• Capture evidence: Take screenshots of your position panel showing entry price, leverage, liquidation price, and time of liquidation.
• Export historical data: Use Bybit’s API or web interface to retrieve mark price logs around the event timestamp.
• Contact support: Go to help.bybit.com > Submit a ticket under “Futures Trading” > “Position/Liquidation Issue.”
• Provide documentation: Attach timestamps, trade IDs, and comparative charts showing mark price behavior.
• Request audit: Ask for a detailed breakdown of the liquidation trigger point and matching engine logs.

Support typically responds within 24–48 hours. Escalation paths exist for unresolved issues, including direct outreach via Twitter/X or community forums. Note that appeals based solely on emotional distress without data are unlikely to yield results.

Preventing Future Perceived Unfair Liquidations

Avoid repeating similar outcomes by adjusting your trading strategy and settings:

• Reduce leverage: Opt for lower levels like 5x or 10x instead of maximum 100x.
• Enable price alerts: Set custom notifications when mark price approaches your liquidation level.
• Use stop-loss orders wisely: Place them strategically while accounting for slippage.
• Monitor funding rates: High positive or negative rates can erode margin over time.
• Diversify across contracts: Avoid concentrating large capital in single positions.

Consider switching to isolated margin mode to limit exposure per trade. In cross-margin, your entire wallet balance supports all positions, increasing cascade risks. Isolated margin confines losses to allocated funds, enhancing control.

Frequently Asked Questions

Why did I get liquidated even though the price rebounded quickly?

Liquidation is irreversible once triggered. Even if price recovers seconds later, the system executes closure when mark price hits liquidation level. Fast rebounds don't negate prior margin insolvency.

Can Bybit manipulate liquidations to profit from my loss?

No. Bybit does not gain directly from user losses. Liquidated positions go into the insurance fund, which protects the platform from defaults. The exchange operates independently of individual trade outcomes.

Is there a way to see past liquidation events on my account?

Yes. Go to “Assets” > “Bills” > Filter by “Liquidation.” This log shows all historical liquidations, including time, pair, size, and PNL impact.

What happens to my position after liquidation?

The system closes your entire position at the best available price. Any remaining value above bankruptcy price returns to your wallet. If filled below, the deficit is covered by the insurance fund, not charged to you.