In a dramatic display of the risks of emotional trading and high leverage, one Ethereum trader, who started with a portfolio of 0xcddf, suffered one of the largest losses in modern history, losing more than 90% of his capital in just two days. According to cryptocurrency investigator Eugene, this trader's capital sharply declined from $2.96 million to just $250,000, as a series of aggressive leveraged trades had astonishingly adverse results.
It all began on May 18, when he opened a large sell position on Ethereum - 41,851 Ethereum at $2,514 using 25x leverage. With a tight liquidation price of $2,525, the risk was enormous. Unfortunately for him, Ethereum started to rise, triggering stop-loss orders and liquidating his position - costing him $2.46 million in one go. But the irony? The value of Ethereum dropped immediately after he exited.
In a desperate attempt to recover, he jumped into Bitcoin trading, opening a $17.6 million buy position at $106,580 with 40x leverage. But once again, Bitcoin moved against him. In just 45 minutes, the position was liquidated, reducing his balance to $250,000.
Undeterred, he returned to the market with one last move: a new sell position on Ethereum at $2,444, with 25x leverage - as he had anticipated. The market dubbed this strategy 'the punching bag': changing direction every time, but always on the wrong side.
This story is not just shocking, but serves as a wake-up call for traders everywhere. High leverage not only amplifies your profits but also magnifies your mistakes. In the volatile cryptocurrency markets, emotional trading can be the cause of your downfall.
