The ENA 5x short position recorded an unrealized loss of more than 3.2 million USD since the end of July 2023.
At the same time, short positions in other Tokens within the Ethereum ecosystem also caused significant losses for investors, forcing them to increase margin to avoid liquidation.
MAIN CONTENT
The ENA 5x short position has an unrealized loss of 3.288 million USD since the end of July 2023.
Shorting the Tokens ETH, LDO, MKR, CRV also resulted in a loss of 2.84 million USD.
Added 1.6 million USDC margin to Hyperliquid to avoid liquidation.
How much unrealized loss does the ENA 5x short position have and what is the reason?
This address opened a short position on ENA with 5x leverage at a price of 0.5236 USD, but to date, the price of ENA has risen to 0.7328 USD, resulting in an unrealized loss of more than 3.288 million USD.
The significant difference between the entry price and the current price is the main reason for this loss. High-leverage short positions carry high risk when the market moves contrary to predictions.
Analysis from Ai Yi, an On-chain expert, shows that choosing the wrong market trend and high leverage is a common cause of significant losses in margin trading.
What impact does shorting Tokens in the Ethereum ecosystem have?
In addition to ENA, this address also shorted Tokens ETH, LDO, MKR, CRV, with a total unrealized loss of 2.84 million USD due to the strong price increase of these Tokens.
Diversifying short trades does not necessarily help reduce risk during periods of high volatility in the cryptocurrency market; rather, it increases financial pressure on investors.
This highlights the importance of thorough analysis and risk management when executing margin trades across different Tokens within the same ecosystem.
"Timely margin addition is the only solution to avoid liquidation when holding a large losing position in a rapidly fluctuating market."
Ai Yi, On-chain analysis expert, August 2023
How did investors avoid liquidation of their positions?
To avoid liquidation of short positions, investors quickly deposited an additional 1.6 million USDC into the Hyperliquid platform to increase their margin capacity.
Increasing margin like this helps maintain positions on the exchange and avoid total loss, but also means increasing capital risk many times over if prices continue to move against predictions.
This is a common strategy among whales, implemented to maintain positions and seek recovery opportunities or exit trades at more favorable times.
How should margin trading strategies be applied to minimize risk?
To limit the risk of losses and liquidation, investors need to choose moderate leverage while closely monitoring cryptocurrency market developments.
Always set reasonable stop-loss orders and establish strict risk management to minimize losses and protect investment capital.
Professional experience also emphasizes the role of diversifying portfolios and controlling margin costs in margin trading to avoid excessive financial pressure.
Frequently Asked Questions
What is the ENA 5x short position and why does it cause large losses?
Shorting ENA 5x means selling short with 5 times leverage; if the price rises instead of falling, it will create a large unrealized loss, as in the case of losing over 3.2 million USD due to the price of ENA rising from 0.5236 to 0.7328 USD.
Does increasing margin help avoid liquidation?
Yes, adding margin like 1.6 million USDC helps maintain positions and avoid automatic liquidation when there are significant losses, but there is still a risk if prices do not recover.
What leverage should be used when trading Tokens in the Ethereum ecosystem?
It is advisable to choose low to moderate leverage, accompanied by strict risk management and close market monitoring to reduce the chances of significant losses and liquidation.
Is it safe to short many Tokens at the same time?
Shorting multiple Tokens can increase financial risk if the market moves in the same direction, causing simultaneous losses; reasonable portfolio diversification is needed to reduce risks.
How to control losses when trading on margin?
Using stop-loss orders, closely monitoring market developments, and only using appropriate leverage are effective ways to control loss risks.
Source: https://tintucbitcoin.com/ena-lo-3288-trieu-usd-them-16-trieu-usdc/
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