diff --git a/app/components/UI/Perps/Views/PerpsClosePositionView/PerpsClosePositionView.tsx b/app/components/UI/Perps/Views/PerpsClosePositionView/PerpsClosePositionView.tsx
index 853ef3e8ff20..33ea2b69f9df 100644
--- a/app/components/UI/Perps/Views/PerpsClosePositionView/PerpsClosePositionView.tsx
+++ b/app/components/UI/Perps/Views/PerpsClosePositionView/PerpsClosePositionView.tsx
@@ -800,7 +800,6 @@ const PerpsClosePositionView: React.FC = () => {
               (orderType === 'limit' &&
                 (!limitPrice || parseFloat(limitPrice) <= 0)) ||
               (orderType === 'market' && closePercentage === 0) ||
-              receiveAmount <= 0 ||
               !validationResult.isValid
             }
             loading={isClosing}
diff --git a/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.test.ts b/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.test.ts
index 4b9b309ddf16..1244c1490a05 100644
--- a/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.test.ts
+++ b/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.test.ts
@@ -110,7 +110,7 @@ describe('usePerpsClosePositionValidation', () => {
     expect(result.current.errors).toHaveLength(0);
   });
 
-  it('should return error when user will receive negative amount', async () => {
+  it('returns warning (not error) when user will receive negative amount', async () => {
     mockValidateClosePosition.mockResolvedValue({ isValid: true });
 
     const params = {
@@ -126,9 +126,12 @@ describe('usePerpsClosePositionValidation', () => {
       expect(result.current.isValidating).toBe(false);
     });
 
-    expect(result.current.isValid).toBe(false);
-    expect(result.current.errors).toContain(
-      strings('perps.close_position.negative_receive_amount'),
+    expect(result.current.isValid).toBe(true);
+    expect(result.current.errors).toHaveLength(0);
+    expect(result.current.warnings).toContain(
+      strings('perps.close_position.negative_receive_warning', {
+        amount: '100.00',
+      }),
     );
   });
 
diff --git a/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.ts b/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.ts
index 62af8b8dfee0..0e55d2451045 100644
--- a/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.ts
+++ b/app/components/UI/Perps/hooks/usePerpsClosePositionValidation.ts
@@ -54,17 +54,12 @@ interface ValidationResult {
  * - Example: ERROR - Trying to close a $5 position (below $6 minimum on mainnet)
  * - Note: This shouldn't happen if positions were opened correctly
  *
- * 4. NEGATIVE RECEIVE AMOUNT
- * - When fees exceed the position value + P&L
- * - Example: ERROR - Position worth $10, fees are $12, user would receive -$2
- * - Protects users from paying to close losing positions
- *
- * 5. MISSING LIMIT PRICE (checked by protocol validation)
+ * 4. MISSING LIMIT PRICE (checked by protocol validation)
  * - Limit orders require a price to be specified
  * - Example: ERROR - Limit order with no price or price <= 0
  * - Note: This is validated by the provider, not duplicate-checked in UI
  *
- * 6. ZERO AMOUNT FOR MARKET ORDER
+ * 5. ZERO AMOUNT FOR MARKET ORDER
  * - Market orders with 0% close percentage
  * - Example: ERROR - Slider at 0% for market order
  *
@@ -84,6 +79,11 @@ interface ValidationResult {
  * - Example: WARNING - Closing only 2% of a $5,000 position ($100)
  * - Useful for taking small profits but may not justify transaction costs
  *
+ * 3. NEGATIVE RECEIVE AMOUNT
+ * - When fees exceed the recoverable value from the position
+ * - Example: WARNING - Closing will cost you $2 due to fees and losses
+ * - User can still proceed to close the position if they choose to exit
+ *
  * ==========================================
  * SPECIAL BEHAVIORS:
  * ==========================================
@@ -168,9 +168,13 @@ export function usePerpsClosePositionValidation(
         );
       }
 
-      // Check if user will receive a positive amount after fees
-      if (receiveAmount <= 0) {
-        errors.push(strings('perps.close_position.negative_receive_amount'));
+      // Warn if user will receive negative amount (but allow them to proceed)
+      if (receiveAmount < 0) {
+        warnings.push(
+          strings('perps.close_position.negative_receive_warning', {
+            amount: Math.abs(receiveAmount).toFixed(2),
+          }),
+        );
       }
 
       // Limit order specific validation (price warning only - required check is done by protocol)
diff --git a/locales/languages/en.json b/locales/languages/en.json
index 86e04c5c09b4..1dc404063fb1 100644
--- a/locales/languages/en.json
+++ b/locales/languages/en.json
@@ -1196,6 +1196,7 @@
       "minimum_remaining_error": "Cannot partial close: remaining position (${{remaining}}) would be below minimum order size (${{minimum}}). Please close 100% instead.",
       "must_close_full_below_minimum": "Position value is below $10. You must close 100% of the position.",
       "negative_receive_amount": "The fees exceed your position value",
+      "negative_receive_warning": "Closing this position will cost you ${{amount}} due to fees and losses.",
       "no_amount_selected": "Please select an amount to close",
       "order_type_reverted_to_market_order": "Changed to market order",
       "you_need_set_price_limit_order": "You need to set a price for a limit order."