According to data from Lookonchain, ETH whale 0x9626 is facing the risk of forced liquidation of a 25x leveraged short position on ETH.
Currently, this whale still holds a short position of 12,500 ETH, equivalent to 40.7 million USD, with losses exceeding 2 million USD and the forced liquidation price is 3,279.57 USD.
MAIN CONTENT
ETH whale 0x9626 is holding a short position of 12,500 ETH with 25x leverage.
Current losses exceed 2 million USD, causing forced liquidation pressure.
The estimated liquidation price is 3,279.57 USD, lower than the current market price.
How is ETH whale 0x9626 facing the risk of liquidation on a 25x leveraged short position?
Data provided by Lookonchain confirms that ETH whale 0x9626 is holding a short position of 12,500 ETH using 25x leverage and is facing the risk of forced liquidation due to significant losses.
Using high leverage increases the risk of liquidation when ETH prices fluctuate. Observations show that this whale has partially closed a position to minimize risk but is still recording losses of over 2 million USD. The liquidation price is determined to be 3,279.57 USD, significantly lower than the current market price of ETH.
“High leverage always carries the risk of severe liquidation in short positions, especially when the cryptocurrency market fluctuates rapidly and strongly.”
Tran Minh Duc, cryptocurrency analyst, 2024
Why is managing a large leveraged short position important for cryptocurrency whales?
Experts agree that controlling risk in leveraged trading is a vital factor to limit losses and maintain asset stability.
Whale 0x9626, although having reduced part of the position to alleviate liquidation pressure, maintaining 12,500 ETH short on 25x leverage still poses a risk of rapid loss. According to a report by CryptoQuant in 2023, high-leverage positions often incur significant losses during sudden price surges of ETH, leading to millions of USD liquidations on major exchanges.
“High-leverage trades require sharpness and strict risk management to avoid total asset loss, especially in the highly volatile cryptocurrency market.”
Nguyen Van Hoang, CEO of a cryptocurrency investment fund, 2023
What is the impact of forced liquidation positions on the ETH market and retail investors?
The forced liquidation of large whales can create significant price volatility on ETH and affect overall sentiment in the investment community.
When whale 0x9626 liquidates at the price of 3,279.57 USD, selling pressure may push ETH prices lower in the short term. However, the cryptocurrency market often sees recoveries following large-scale liquidations, due to new buyers entering and demand from retail investors. This trend is noted in CoinMetrics' Q1 2024 market report with many liquidation events creating opportunities for flexible investors to 'play back.'
How can investors limit their risk when trading on leverage in the cryptocurrency market?
Experts recommend that investors should establish a detailed risk management plan, use stop-loss orders, and avoid setting leverage too high to prevent unexpected liquidations.
Additionally, according to a report by Binance Research 2023, closely monitoring price movements and market sentiment helps mitigate losses in short or long positions. Proper portfolio allocation and avoiding excessive leverage will effectively protect assets from strong fluctuations.
Frequently Asked Questions
What is forced liquidation? Forced liquidation occurs when an investor's leveraged position falls below the required margin level, forcing the exchange to automatically close the position to avoid deeper losses.
What does 25x leverage mean? 25x leverage allows an investor to use a small capital multiplied by 25 for trading, but the risk of liquidation also increases at this rate.
What is a short position? A short position is selling a cryptocurrency asset with the expectation that the price will decrease, allowing for a repurchase at a lower price, profiting from this difference.
How to reduce risk when trading leveraged shorts? Investors should manage capital tightly, avoid using excessively high leverage, and set reasonable stop-loss orders to protect assets.
What is the impact of whale liquidation on the market? Large liquidations by whales often cause short-term price volatility and affect investor sentiment, but also create buying opportunities for others.
Source: https://tintucbitcoin.com/eth-whale-thua-lo-2-trieu-usd/
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