In the world of digital currencies, Bitcoin has always been the center of attention. However, the risks that come with it are always present, and the issue of Bitcoin liquidation has attracted much attention. So, how should we respond when Bitcoin explodes? Are you bound to lose money? This article will delve into it from multiple angles to help you unravel the mysteries of this digital currency world.

First, let us understand the nature of Bitcoin liquidation. Bitcoin liquidation is not a rare event. It refers to a situation where investors lose money in their accounts to a certain extent due to price fluctuations in leveraged trading and are unable to continue to maintain their positions. At this time, the trading platform will automatically close the position and sell the Bitcoin held by the investor at the current market price to make up for the loss. In this process, investors may face the risk of losing money.

Next, let’s explore some effective strategies for dealing with Bitcoin liquidations. First of all, reasonable control of leverage is the key to avoiding liquidation. Excessively high leverage will amplify risks, and once the market fluctuates violently, it can easily lead to liquidation. Secondly, setting stop loss orders in time is also an important preventive measure. By setting a stop-loss order, you can automatically close your position when the price hits a set point, reducing the possibility of further losses. In addition, diversifying investment portfolios and spreading risks is also one of the effective strategies. Don't put all your eggs in the same basket, allocate funds reasonably and reduce the risks caused by a single investment.

However, even if a variety of precautions are taken, whether one will lose money when Bitcoin explodes is still a matter of great concern. In fact, whether you lose money when you liquidate your position depends on many factors. The first is the gap between the price of investors' positions and the market price. If the market price is much lower than the position price, investors are likely to lose money when the position is liquidated. Secondly, there is the impact of leverage ratio. Excessive leverage will aggravate losses and lead to greater capital losses. In addition, market volatility is also an important factor affecting the degree of money loss. If the market is volatile, the risk of losing money in the event of a liquidation increases.

However, even if you face the risk of Bitcoin liquidation, there is no need to panic too much. Controlling risks and rationally planning investment strategies are the keys to avoiding liquidation and loss of money. In addition, keeping abreast of market trends and maintaining rational thinking can also help investors better face the challenge of Bitcoin liquidation.

In the digital currency market, risks and opportunities coexist. Bitcoin liquidation is just one of these situations, and how to deal with it effectively depends on the investor's risk tolerance and coping ability. We hope that through the discussion in this article, investors can have a deeper understanding of the issue of Bitcoin liquidation and thus better protect their investments. I hope every investor can protect Bitcoin in the world of digital currency and find a way to deal with liquidation.

The four most famous international exchanges:

Binance INTL	OKX INTL	Gate.io INTL	Huobi INTL
China Line　APP DL	China Line　APP DL	China Line　APP DL	China Line　APP DL

Note: The above exchange logo is the official website registration link, and the text is the APP download link.

Before understanding what to do if a Bitcoin liquidation occurs, we can first understand what exactly a Bitcoin liquidation is. Many newbies in the currency circle do not understand this concept very well. In fact, Bitcoin liquidation occurs when the price drops to the principal in Bitcoin contract transactions and the Bitcoins purchased with borrowed money are only enough to repay the borrowed money. Bitcoin liquidation is very common. Even when the price of Bitcoin rises, liquidation may occur, because investors can also short Bitcoin. If the price of Bitcoin rises, short sellers will lose money. So what should you do if your Bitcoin position explodes? What everyone is more concerned about is whether you will lose money if your Bitcoin position is liquidated? Let the editor of the currency circle talk about it below.

 What should I do if my Bitcoin position is liquidated?

A Bitcoin liquidation does not mean a total loss. After a Bitcoin liquidation occurs, there may still be money in the account, so it is not a total loss. A liquidation is a total loss. If there is a liquidation of Bitcoin and you choose to continue to hold the order in your hand, you will need to add additional margin to the account to maintain sufficient margin in the account.

When a Bitcoin liquidation happens, everyone is unwilling to do so. First of all, you can cut the meat in time, get out quickly before the price hits the bottom, and stop the loss in time. In addition, you can ask the company platform to intervene forcibly, which can also reduce your losses a little. What should I do if my Bitcoin position explodes? The fundamental reason for the liquidation is that you borrowed money to speculate in Bitcoin, so you will be heavily in debt. If you did not borrow money to speculate in Bitcoin, you would not have the problem of liquidation. Therefore, you must be cautious when investing, do not be greedy for too much, and try not to borrow money to speculate in Bitcoin when you are not very experienced and understand the Bitcoin market. Another point is that most liquidations occur in Bitcoin contract transactions. You can choose spot transactions, which will have relatively less risk.

 Do I have to lose money if my Bitcoin position is liquidated?

Of course you have to lose money if your Bitcoin position explodes. Bitcoin plummeted, 360,000 people liquidated their positions for 24.5 billion, and some people lost 99% overnight. There are profits and losses in investment, and there is no such thing as a profit-only transaction. Bitcoin is a high-risk investment product, so you must be particularly careful when trading yourself and don't be deceived.

Before investing in digital currencies, everyone should first pay attention to the safety of funds. Funds on platforms with compliance supervision are safer. Next, consider the level of leverage and handling fees. Generally speaking, the larger the platform, the safer it is, and the handling fees are moderate. The smaller the platform, the less secure it is and the lower the handling fee. It is recommended that investors should choose a suitable gold investment platform based on their actual situation (risk tolerance, amount of funds, trading habits).

The concept of Bitcoin was first proposed by Satoshi Nakamoto on November 1, 2008, and was officially born on January 3, 2009. The open source software designed and released based on Satoshi Nakamoto's ideas and the P2P network built on it. Bitcoin is a P2P virtual encrypted digital currency. Peer-to-peer transmission means a decentralized payment system. Unlike all currencies, Bitcoin does not rely on the issuance of a specific monetary institution. It is generated through a large number of calculations based on a specific algorithm. The Bitcoin economy uses a distributed database composed of many nodes in the entire P2P network to confirm and record all transaction behaviors. And use cryptography design to ensure the security of all aspects of currency circulation.

The decentralized nature of P2P and the algorithm itself ensure that currency value cannot be artificially manipulated by mass production of Bitcoins. Design based on cryptography allows Bitcoin to be transferred or paid only by real owners. This also ensures the anonymity of currency ownership and circulation transactions. The biggest difference between Bitcoin and other virtual currencies is that its total number of stars is very limited and it is extremely scarce. On December 17, 2017, Bitcoin reached an all-time high of $19,850. On July 27, 2020, Bitcoin once again exceeded the $10,000 mark.

The above content is the detailed answers of the editor of the currency circle to the two questions of what to do if the Bitcoin position is liquidated and whether you have to lose money when the Bitcoin position is liquidated. As we all know, the risk of leveraged trading is still very high. After all, in leveraged trading, the multiples of profits and losses are magnified. Once everyone loses money and touches the minimum liquidation line of margin trading, it is easy to have a liquidation. If we If more collateral is not provided to the trading platform, the platform will generally resort to forced liquidation for settlement. Everyone must be cautious when conducting leveraged transactions, and be sure not to add very high leverage.