# Liquidation in Crypto: When Margin Trading "Blows Your Account"
Have you ever heard a trader say "I got liquidated" and then disappear from the Discord group? That's when something bad has happened to their account.
**What is liquidation in simple terms?**
Suppose you have 1000 USDT, you borrow an additional 4000 USDT from the exchange ( using 5x leverage ) to buy BTC. At this point, you control a value of 5000 USDT. But if BTC drops by 20%, your account will go down to 4000 USDT - just enough to repay the loan. At this point, the exchange will automatically sell all your BTC, whether y
Have you ever heard a trader say "I got liquidated" and then disappear from the Discord group? That's when something bad has happened to their account.
**What is liquidation in simple terms?**
Suppose you have 1000 USDT, you borrow an additional 4000 USDT from the exchange ( using 5x leverage ) to buy BTC. At this point, you control a value of 5000 USDT. But if BTC drops by 20%, your account will go down to 4000 USDT - just enough to repay the loan. At this point, the exchange will automatically sell all your BTC, whether y
BTC-0.07%
