Counterparty Liquidation

When you enter into a perpetual futures contract, there is always another side to the trade - the person who holds the opposite position to yours. This person may have fewer funds on their account or use higher leverage than you, so there may be a point when he/she is liquidated. When their position is liquidated, your position doesn’t have the opposite side anymore.
Unfortunately, we can’t let your position to stay open after such an event, because a futures trade is a contract between two counterparties, so you profit or lose money to this counterparty. In this case, your position will also be liquidated (this is called a counterparty liquidation), while you will pocket all the profits collected to date. You will be free to enter another futures contract after this.
Counterparty liquidation is an infrequent event happening due to the market nature, but you still need to keep in mind its low probability.