diff --git a/liquidity/liquidity.go b/liquidity/liquidity.go
index 361736a..97548b9 100644
--- a/liquidity/liquidity.go
+++ b/liquidity/liquidity.go
@@ -1084,17 +1084,28 @@ func (m *Manager) currentSwapTraffic(loopOut []*loopdb.LoopOut,
 	}
 
 	for _, in := range loopIn {
-		// Skip completed swaps, they can't affect our channel balances.
-		if in.State().State.Type() != loopdb.StateTypePending {
-			continue
-		}
-
 		// Skip over swaps that may come through any peer.
 		if in.Contract.LastHop == nil {
 			continue
 		}
 
-		traffic.ongoingLoopIn[*in.Contract.LastHop] = true
+		pubkey := *in.Contract.LastHop
+
+		switch {
+		// Include any pending swaps in our ongoing set of swaps.
+		case in.State().State.Type() == loopdb.StateTypePending:
+			traffic.ongoingLoopIn[pubkey] = true
+
+		// If a swap failed with an on-chain timeout, the server could
+		// not route to us. We add it to our backoff list so that
+		// there's some time for routing conditions to improve.
+		case in.State().State == loopdb.StateFailTimeout:
+			failedAt := in.LastUpdate().Time
+
+			if failedAt.After(failureCutoff) {
+				traffic.failedLoopIn[pubkey] = failedAt
+			}
+		}
 	}
 
 	return traffic
@@ -1105,6 +1116,7 @@ type swapTraffic struct {
 	ongoingLoopOut map[lnwire.ShortChannelID]bool
 	ongoingLoopIn  map[route.Vertex]bool
 	failedLoopOut  map[lnwire.ShortChannelID]time.Time
+	failedLoopIn   map[route.Vertex]time.Time
 }
 
 func newSwapTraffic() *swapTraffic {
@@ -1112,6 +1124,7 @@ func newSwapTraffic() *swapTraffic {
 		ongoingLoopOut: make(map[lnwire.ShortChannelID]bool),
 		ongoingLoopIn:  make(map[route.Vertex]bool),
 		failedLoopOut:  make(map[lnwire.ShortChannelID]time.Time),
+		failedLoopIn:   make(map[route.Vertex]time.Time),
 	}
 }
 
diff --git a/liquidity/liquidity_test.go b/liquidity/liquidity_test.go
index 076d473..203e2c4 100644
--- a/liquidity/liquidity_test.go
+++ b/liquidity/liquidity_test.go
@@ -1817,3 +1817,184 @@ func testSuggestSwaps(t *testing.T, setup *testSuggestSwapsSetup,
 	require.Equal(t, expectedErr, err)
 	require.Equal(t, expected, actual)
 }
+
+// TestCurrentTraffic tests recording of our current set of ongoing swaps.
+func TestCurrentTraffic(t *testing.T) {
+	var (
+		backoff        = time.Hour * 5
+		withinBackoff  = testTime.Add(time.Hour * -1)
+		outsideBackoff = testTime.Add(backoff * -2)
+
+		success = []*loopdb.LoopEvent{
+			{
+				SwapStateData: loopdb.SwapStateData{
+					State: loopdb.StateSuccess,
+				},
+			},
+		}
+
+		failedInBackoff = []*loopdb.LoopEvent{
+			{
+				SwapStateData: loopdb.SwapStateData{
+					State: loopdb.StateFailOffchainPayments,
+				},
+				Time: withinBackoff,
+			},
+		}
+
+		failedOutsideBackoff = []*loopdb.LoopEvent{
+			{
+				SwapStateData: loopdb.SwapStateData{
+					State: loopdb.StateFailOffchainPayments,
+				},
+				Time: outsideBackoff,
+			},
+		}
+
+		failedTimeoutInBackoff = []*loopdb.LoopEvent{
+			{
+				SwapStateData: loopdb.SwapStateData{
+					State: loopdb.StateFailTimeout,
+				},
+				Time: withinBackoff,
+			},
+		}
+
+		failedTimeoutOutsideBackoff = []*loopdb.LoopEvent{
+			{
+				SwapStateData: loopdb.SwapStateData{
+					State: loopdb.StateFailTimeout,
+				},
+				Time: outsideBackoff,
+			},
+		}
+	)
+
+	tests := []struct {
+		name     string
+		loopOut  []*loopdb.LoopOut
+		loopIn   []*loopdb.LoopIn
+		expected *swapTraffic
+	}{
+		{
+			name: "completed swaps ignored",
+			loopOut: []*loopdb.LoopOut{
+				{
+					Loop: loopdb.Loop{
+						Events: success,
+					},
+					Contract: &loopdb.LoopOutContract{},
+				},
+			},
+			loopIn: []*loopdb.LoopIn{
+				{
+					Loop: loopdb.Loop{
+						Events: success,
+					},
+					Contract: &loopdb.LoopInContract{},
+				},
+			},
+			expected: newSwapTraffic(),
+		},
+		{
+			// No events indicates that the swap is still pending.
+			name: "pending swaps included",
+			loopOut: []*loopdb.LoopOut{
+				{
+					Contract: &loopdb.LoopOutContract{
+						OutgoingChanSet: []uint64{
+							chanID1.ToUint64(),
+						},
+					},
+				},
+			},
+			loopIn: []*loopdb.LoopIn{
+				{
+					Contract: &loopdb.LoopInContract{
+						LastHop: &peer2,
+					},
+				},
+			},
+			expected: &swapTraffic{
+				ongoingLoopOut: map[lnwire.ShortChannelID]bool{
+					chanID1: true,
+				},
+				ongoingLoopIn: map[route.Vertex]bool{
+					peer2: true,
+				},
+				// Make empty maps so that we can assert equal.
+				failedLoopOut: make(
+					map[lnwire.ShortChannelID]time.Time,
+				),
+				failedLoopIn: make(map[route.Vertex]time.Time),
+			},
+		},
+		{
+			name: "failure backoff included",
+			loopOut: []*loopdb.LoopOut{
+				{
+					Contract: &loopdb.LoopOutContract{
+						OutgoingChanSet: []uint64{
+							chanID1.ToUint64(),
+						},
+					},
+					Loop: loopdb.Loop{
+						Events: failedInBackoff,
+					},
+				},
+				{
+					Contract: &loopdb.LoopOutContract{
+						OutgoingChanSet: []uint64{
+							chanID2.ToUint64(),
+						},
+					},
+					Loop: loopdb.Loop{
+						Events: failedOutsideBackoff,
+					},
+				},
+			},
+			loopIn: []*loopdb.LoopIn{
+				{
+					Contract: &loopdb.LoopInContract{
+						LastHop: &peer1,
+					},
+					Loop: loopdb.Loop{
+						Events: failedTimeoutInBackoff,
+					},
+				},
+				{
+					Contract: &loopdb.LoopInContract{
+						LastHop: &peer2,
+					},
+					Loop: loopdb.Loop{
+						Events: failedTimeoutOutsideBackoff,
+					},
+				},
+			},
+			expected: &swapTraffic{
+				ongoingLoopOut: make(
+					map[lnwire.ShortChannelID]bool,
+				),
+				ongoingLoopIn: make(map[route.Vertex]bool),
+				failedLoopOut: map[lnwire.ShortChannelID]time.Time{
+					chanID1: withinBackoff,
+				},
+				failedLoopIn: map[route.Vertex]time.Time{
+					peer1: withinBackoff,
+				},
+			},
+		},
+	}
+
+	for _, testCase := range tests {
+		cfg, _ := newTestConfig()
+		m := NewManager(cfg)
+
+		params := m.GetParameters()
+		params.FailureBackOff = backoff
+		require.NoError(t, m.SetParameters(context.Background(), params))
+
+		actual := m.currentSwapTraffic(testCase.loopOut, testCase.loopIn)
+		require.Equal(t, testCase.expected, actual)
+	}
+}