Do you think the more profit you earn from a short position, the safer it is? The conclusion is the exact opposite: short positions with higher profits are far more likely to be picked by ADL. ADL selection criteria do not measure your total absolute profit, but the product of your unrealized profit percentage and leverage multiple — the higher the score, the earlier your position gets forcibly closed.
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The "Top Performer Curse" of ADL: Why More Profit Equals Higher Risk
ADL is the final risk fallback mechanism of crypto exchanges: when the insurance fund cannot cover the losses from counterparty liquidations that run into negative balance, the system will forcibly close the highest profit, highest leverage opposing positions to fill the funding gap.
ADL ranking score = Profit and loss percentage × Effective leverage
Short positions are inherently disadvantaged under this formula for the following reasons:
| Dimension | Disadvantage of Short Positions | Actual Impact |
|---|---|---|
| Profit & Loss Percentage Calculation | The maximum unrealized profit ratio of a short position is capped at the full price drop from entry price to 0, so the upside profit ratio is naturally limited | With the same price swing, a long position can earn 100% while a short position may only earn 50% |
| Leverage Multiplier Effect | To reach the same level of return, short traders usually need to open positions with much higher leverage | Higher leverage makes the ADL score rise exponentially |
| Extreme Market Trigger Timing | During a crash, the more long positions get liquidated, the higher the chance ADL will be triggered | Short positions face the highest ADL risk right near the price bottom |
Practical Comparison: Same 50% Profit, Short Positions Carry More Risk
Assume two separate positions:
| Position | Profit & Loss Percentage | Effective Leverage | ADL Score |
|---|---|---|---|
| Long A | 50% | 5x | 2.5 |
| Short B | 50% | 5x | 2.5 |
Their scores look identical on paper. But a short position needs the price to drop 50% (from 100 to 50) to earn 50% profit, while a long position only needs the price to rise 50% (from 100 to 150) to hit the same return. In real markets, sharp crashes trigger ADL far more often than slow rallies: prices drop much faster, cause far more negative-balance liquidations, and drain the insurance fund much quicker.
Data analysts from Paradigm ran statistics on one ADL event on Hyperliquid: out of around 35,000 ADL execution operations, 99% happened during a 5-minute market crash window, and the ADL trigger point landed exactly near the price bottom. If you held a profitable short position at that moment, you would most likely be at the very front of the ADL queue.
ADL rules on Bitget and Bybit clearly state: "ADL prioritizes profitable positions. The higher your profit and leverage, the more easily you will be selected." No matter how much profit your short position has made, you are essentially waiting in line for the system to close you out.
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Validation Method to Check Your Status
Open the position panel on the futures trading page, and check the ADL indicator next to your short positions. The more lit bars you see, the higher your ranking in the ADL queue. Short positions are especially dangerous during one-sided crash markets: if your indicator shows 4 or more lit bars, we recommend you partially take profit manually or lower your leverage, instead of waiting for the system to force close your position.
