How does perpetual contracts work when the counter party closes?

Question

As I understand how crypto perpetual contracts work - when I enter a long position on a crypto exchange, my order is matched with a counter party short. The long/buyer and short/seller will exchange the difference in value between the time a contract opens and closes.

Assuming the exchange uses a $1 USD contract side and the current BTC price is $10,000. If I go long $100 with zero leverage then I would be matched with 100 short contracts on the books at $10,000 price.

What happens though if price increases by 5% so my long is in profit but the short contracts I was matched with get closed.. they had a stop loss or where liquidated. Soon after the price goes up another 1% and I want to sell. Who pays my 6% ?

Does anyone know how this works please ?

Thank you.

Answer 1

Your counterparty is the current market, new buyers. If the buyers want to get in the market at the time you want to get out, then they have to pay the market price. You are not tied to specific buyers and sellers. Your counterparty is whoever happens to be in the market at that time. They pay your 6%.