Recently, a crypto friend recounted his experience: at 3 AM, the cold light from his phone screen hit Lao Zhang's face — he had just received a liquidation text from the exchange, and his $200,000 capital instantly dropped to zero. This was the third time this year he was forced to liquidate, yet the next day he quietly recharged $50,000, preparing to fight again.
This is not an isolated case. Open any contract community, and the screen is filled with celebrations of “doubling overnight,” while in the corner, the silence of liquidated traders lies forever. Knowing full well that this is a “predatory” game, why do so many still fly into the fire?
Keep your eyes open, beware of those teachers who drag you into communities and brainwash you every day, often promoting shady platforms with 500x leverage.
01 The Meat Grinder of Liquidation, the Deadly Temptation of Contracts
“It’s all about the thrill!” This is the standard opening line of crypto contract players. The essence of contract trading is to leverage small amounts of money to move large markets — using $100 as if it were $1,000.
Current price of Bitcoin is $100,000, opening a long position with 10x leverage, a 10% rise earns $1,000; but a 10% drop instantly wipes out the capital. This is the stark reality of the “newbie meat grinder.”
The path to liquidation is like a meticulously designed death program:
- Enter with 10x or even 100x leverage
- Sudden market fluctuations lead to huge losses
- Margin shortfalls trigger additional notices
- Forced liquidation after being unable to make up for margin
- Capital drops to zero or even owes the platform money
Data shows that on a certain day in 2024, Bitcoin plummeted 8% in half an hour, leading to $320 million in liquidations across the network. In the past 24 hours, 138,000 people were liquidated, and $7.6 billion vanished.
02 Deadly Attraction: Human Weakness Precisely Targeted
When the community goes crazy sharing screenshots of “turning 5,000 capital into 800,000 in just 12 hours,” no one tells you the truth — the person sharing may have opened 10 accounts, and only 1 guessed the direction correctly. You need a clear mind to discern the true and false communities; some that you enter may just be digging a big pit waiting for you to jump in!
The illusion of getting rich + survivor bias creates the most deadly trap in the crypto world:
“10x leverage, a 1% fluctuation means a 10% profit”
The exchange's advertising slogans are as precise as a scalpel, cutting into the nerves of human greed.
More insidious is the zero-sum game nature of the contract market. The Trump concept coin surged 200%, 400,000 retail investors followed suit, only for the project team to suddenly withdraw funds, causing the price to drop to zero in just 3 minutes.
Every penny you earn is stained with the blood and tears of others' liquidations. When novices wail in liquidation at dawn, professional traders are snickering while picking up the “bloody chips.”
03 The Easy Money Business of Exchanges
While the newcomers are bloodied in the tug-of-war, the real winner always sits steadily at the fishing platform — the exchange.
Stunning data reveals the truth: one platform has a daily spot trading volume of $6.3 billion, while the contract trading volume reaches as high as $17.5 billion. In the wave of liquidations, the exchange not only earns a high-frequency trading fee of 0.07%, but also harvests residual value through forced liquidation.
The exchange has even designed a clever addiction mechanism:
- 125x ultra-high leverage is as easily obtainable as drugs
- The “Contract Elite Competition” uses prizes to stimulate players to madly place orders
- Mixing margin and leaderboard features creates a casino-like atmosphere
“For gamblers, winning or losing doesn't matter, what matters is that they keep participating.” A seasoned trader reveals the truth. When you are staring at the K-line at 3 AM, the exchange's server is counting every penny you send.
04 The Survival Rules of the Dark Forest
In this smoke-free battlefield, professional players follow an almost ruthless iron law:
1. Keep single-stop losses strictly within 5% of the capital
2. Avoid the peak times of 2-4 AM when European and American whales are dumping
3. Withdraw 50% of profits immediately for safety
Yet ordinary people's operations are textbook cases of suicidal behavior: holding on when losing, chasing high when winning, and going all-in with 100x leverage after liquidation. The whales don't even need to manipulate the market, they just need to shout in the community “Target $100,000,” and countless leveraged bulls jump into the meat grinder.
The lack of regulation makes hunting even more rampant. A 2020 central bank report revealed: some platforms deceive clients into participating through false transactions, then manipulate prices and maliciously crash to force liquidation.
When the whale James Wynn was targeted and his nearly $100 million position was obliterated, he lamented, “I was hunted!”
05 A Survival Guide Watered by Blood and Tears
If you still insist on stepping into this minefield, four rules for survival may help you live a few more days:
> 1. Don't exceed 3x leverage (100x leverage is suicidal, not an investment)
> 2. Divide the capital into 10 parts (liquidated 9 times but still have capital to recover)
> 3. Lock profits immediately (if you earn but don’t withdraw, you'll eventually give it back)
The warning from BlackRock analyst Rick Rieder is worth pondering: “This is no different from the internet bubble. The internet is a good concept, but people have created too much excess, which must be cleaned up.”
When you are intoxicated in high leverage, you have essentially become fuel for market cleansing.
The notification sound of liquidation texts at dawn has become the nightmare BGM for countless people. Some self-deprecate: “There are only zero or countless liquidations,” just like gamblers swearing with empty pockets that “next time, I will definitely break even.”
The cruelest truth in the crypto world emerges:
Earn money through cycles in spot trading
Earn money from human nature in contract trading
And the exchange profits from everyone’s money
As Lao Zhang prepares to recharge $50,000 to place another order, the phone's screen reflects his bloodshot eyes. Outside, dawn is breaking, and a new batch of contract players is being awakened by the illusion of “financial freedom.” Meanwhile, the exchange's server forever blinks with an unyielding green light.
Stay away from high leverage, control positions, protect capital ------- E B speculators