Why are rekt bubbles in the wrong place on Bybit?

Article author
Exodesk
  • Updated

To understand this we must understand how liquidations work on Bybit.

Liquidation, is the closing of a trader’s position due to the loss of all, or nearly all, of said trader’s Initial Margin. This is due to the use of leverage and because the trade is made with a contract whose price is derived from an asset and not the asset itself.

When you are given a liquidation price on Bybit, that is not the exact price at which the exchange will execute your liquidation for that specific trade they more so execute your liquidation when price gets within a certain % of that liquidation price you are given.That price in which is actually executed is when you will see a liquidation bubble occur.

Take this for example (see image below)

1 - You can see the high of the candle where we get the rest bubble occur is $23611 

2 - Volume and price of the liquidation show us that 61k contracts were liquidated where that individuals liquidation price was at 23726

so how does this make sense? 

With what is now explained above, within that candle forming (high at $23611) price has hit within the range of % in which Bybit would execute liquidation on the individual who has their liquidation price at $23726, Exocharts is not showing incorrect values this is just the way in which liquidations work, you will not be liquidated at your exact given liquidation price but more so within a tiny % of that.

Exocharts simply shows you when the person with that liquidation prices liquidation is actually executed, hence you may show that price liquidated a level it never came up to but that is not actually the case , as now explained above.


mceclip0.png

2 likes