Liquidation refers to the process of converting any cryptocurrency or asset to fiat money. Liquidation can be both voluntary and forced. Any forced liquidation generally occurs via automatic conversation.

Within the crypto industry, forced liquidation is subjected to margin trading, when the trader fails to comply with the leveraged position. Some of the prominent trading platforms also allow users to calculate the liquidation price, prior to taking a leveraged position.

Liquidation can also occur in the future market as well. As for voluntary liquidation, it is when the trader decides to cash out their crypto or other assets for personal reasons. This includes profit gains, a requirement of lump sum and more.