Every major cryptocurrency exchange has experienced API outages of varying duration — from a few minutes during flash crash events to several hours during major market dislocations. Exchange outages occur most frequently during the moments when active position management is most critical: extreme price movements that stress both exchange infrastructure and your open positions simultaneously. A trading bot that assumes API availability 100% of the time is not production-ready. This guide covers the specific mechanisms that make DennTech bots resilient to exchange outages, how to configure your setup to minimize risk during API disruptions, and what to do when you discover an outage while positions are open.
Related guides: stress testing, circuit breakers, VPS deployment, API security.
Exchange-Side vs. Bot-Side Stop-Losses: The Critical Difference
There are two fundamentally different approaches to stop-loss implementation in automated trading:
| Type | How It Works | Outage Resilience |
|---|---|---|
| Exchange-side stop-loss | A stop order is placed on the exchange order book — the exchange executes it regardless of whether your bot is running or connected | Full — the exchange itself triggers the stop even during bot disconnection or VPS outage |
| Bot-side stop-loss | The bot monitors price and sends a market sell order when stop price is hit | None — if bot disconnects, stop is not triggered. Price can move far beyond the stop level. |
DennTech uses exchange-side stop orders when the exchange supports them — specifically conditional orders (stop-limit or stop-market orders placed via the exchange API). When a position is opened, DennTech simultaneously places a stop order on the exchange order book. If the bot is disconnected for any reason, the exchange-side stop remains active and triggers as designed. Verify that your selected exchange supports exchange-side stop orders for the pair you are trading — see the DennTech docs for exchange-specific stop order support details.
What Happens During an Exchange API Outage
When DennTech detects that the exchange API is unavailable (connection timeout, HTTP 503 responses, etc.):
- New entry signals are suppressed: No new positions are opened while API connectivity is impaired — the bot does not queue entries to execute the moment the API returns.
- Existing exchange-side stops remain active: Stop orders already placed on the exchange order book remain active regardless of DennTech's connectivity to the exchange API.
- Reconnection attempts: DennTech attempts reconnection with exponential backoff (30s, 60s, 120s, etc.) rather than flooding the exchange with rapid retry requests.
- Alert notification: DennTech sends a notification (email/webhook depending on your configured alerts) when API connectivity is lost for more than 5 minutes.
- Position state reconciliation: Upon reconnection, DennTech compares its local position state against the exchange's actual account state — resolving any discrepancies before resuming normal operation.
Minimizing Outage Risk Through Configuration
Key configuration practices that reduce outage impact:
- Always use exchange-side stop orders: Configure in DennTech Settings → Stop Order Type → Exchange-Side. Never rely solely on bot-side price monitoring for stop-loss execution.
- VPS with high-uptime connectivity: Run DennTech on a VPS with a direct, redundant internet connection rather than your home network. See our VPS guide.
- Don't over-concentrate on one exchange: If your entire portfolio is on one exchange and that exchange goes down during a market move, you have no recourse. Multi-exchange distribution reduces single-exchange outage impact. See our multi-exchange guide.
- Use conservative position sizing: If an outage occurs and stops fail for any reason, your position sizing should limit the maximum loss to a manageable level. See our position sizing guide.
What to Do When You Discover an Active Outage
If you learn of an exchange API outage while you have open positions:
- Check the exchange status page: Most major exchanges maintain a status page (status.binance.com, status.kraken.com, etc.) showing current API health
- Verify exchange-side stop orders are placed: Log into the exchange web interface and check whether your stop orders are visible in the open orders list. If they are there, your stops are active and you are protected at those levels.
- If stops are NOT placed exchange-side: Log into the exchange web interface directly and manually place stop orders at the appropriate levels. This is the emergency fallback procedure.
- Wait for API recovery rather than panic-closing: If your stops are in place and the position is within normal drawdown range, waiting for API recovery is generally preferable to manually market-selling during a potentially low-liquidity event.
- Document the outage in your trading journal: Record the outage, positions held, stop status, and outcome for your trading journal review.
Historical Exchange Outage Patterns
Major documented exchange outages to understand the risk profile:
- Binance has experienced API degradation during multiple flash crash events (March 2020, May 2021)
- Coinbase Pro experienced trading halts during the May 2021 selloff
- KuCoin experienced its major security incident in 2020 (hack, not API outage but illustrates exchange-specific risk)
- Kraken has been notably more reliable during high-volatility events compared to some competitors
This history informs exchange selection for risk-sensitive strategies. See exchange guides at the strategies page.
Frequently Asked Questions
- If the exchange has an outage but I have exchange-side stop orders placed, am I fully protected?
- Exchange-side stop orders remain in the order book even during API outages that affect trading interface availability. However, during extreme events that cause the exchange's matching engine itself to halt (not just API slowdowns but actual trading suspensions), even exchange-side orders may not execute until trading resumes. This is the scenario where position sizing conservatism is the ultimate protection — if the maximum loss from any single position is 3–5% of total capital, a matching engine suspension event is painful but survivable. See our stress testing guide for the outage scenario analysis framework.
- How do I test whether DennTech is using exchange-side stop orders on my configuration?
- After DennTech opens a new position, log into the exchange web interface and navigate to Open Orders. You should see a separate stop order with the exchange for that position — not just the open long/short. If no stop order appears in exchange Open Orders, the stop is bot-side only. Check DennTech's Stop Order Type setting in Settings → Risk Management and ensure it is set to Exchange-Side for your exchange. Full configuration documentation at DennTech docs. Compare editions at the pricing page.
- Should I keep a manual emergency stop-loss plan for each open position?
- Yes — maintain a simple manual emergency plan: for each open DennTech position, write down the stop price and the exact manual order you would place on the exchange's web interface if automation fails. This takes less than 2 minutes per position and provides complete fallback coverage. The emergency plan should be part of your periodic review in the trading journal. Combined with exchange-side stops as the primary layer, the manual plan is the backup-of-the-backup that ensures you always have a defined exit regardless of technical failures. See the live demo for context. Get started at the pricing page.
Bot resilience: VPS deployment, circuit breakers, exchange outages (this guide). All strategies at the strategies page.
For planned downtime specifically, read the guide to handling planned exchange maintenance with a bot.