Automatic closure of a leveraged position when collateral no longer satisfies maintenance requirements.
Forced liquidation is best understood as part of a system rather than as an isolated definition. Its related coordinates show the mechanisms, incentives and historical records that give the term practical meaning.
Forced liquidation describes how participants value, trade or obtain exposure to bitcoin. Market behavior can affect adoption and mining economics, but it does not rewrite consensus rules. Price evidence and protocol evidence answer different questions.
Understanding Forced liquidation helps distinguish a verifiable Bitcoin mechanism or historical record from slogans, products and market narratives.
For the clearest picture, read this entry together with Leverage, Collateral, Perpetual futures, Open interest, Volatility. The reverse links also lead from Debt deflation, Leverage, Bitcoin basis trade, Open interest.
Linked to related atlas coordinates
Grounded in a source record
Explains function and trade-offs
Part of the open Bitcoin knowledge graph