Liquidation
Liquidation is the forced closure of a leveraged position by the exchange when losses threaten the borrowed funds, often turning a temporary dip into a permanent loss.
Liquidation happens in leveraged or margin trading. When you borrow to take a position larger than your own capital, the exchange watches how far the trade can move against you before the borrowed money is at risk. If price reaches that point, the exchange closes the position automatically to protect the loan, and your margin is gone. You do not get to wait for a recovery.
This is the sharpest danger of leverage, and it is not only about larger losses but forced ones. A dip that a patient spot holder would simply sit through can be enough to liquidate a leveraged position, converting a temporary drawdown into a realized, permanent loss at the worst possible moment. The more leverage, the smaller the move needed to trigger it.
Crypto Wealth removes this risk entirely by being spot only. There is no leverage, no margin, and no futures, so there is nothing to liquidate. The most you can ever lose is what you chose to put in, and a temporary decline is something you can ride out rather than be forced out of.
