On August 15, EmberCN's statistical data exposed the brutal truth of high-leverage games in the crypto circle — whales like AguilaTrades and James Wynn collectively faced liquidation, with tens of millions of dollars evaporating. This bloodbath is essentially the inevitable backlash of 'high leverage + trend reversal', serving as a wake-up call for all traders: the dark side of the crypto circle's myth of wealth is the bloody meat grinder of leverage.
I. The 'death spiral' of whale liquidations
(I) AguilaTrades: The end of $30,000
As a contract trading whale, AguilaTrades was liquidated to only $30,000 at 2 a.m., with $37.6 million in losses behind it, resulting from the dual strangulation of 'high leverage + contrarian positions'. Its operating model exposes typical gambling behavior: when the market turns, failing to stop-loss in time and instead increasing positions to average down, ultimately being swallowed by the torrent of trends — leverage acts like an amplifier, making crazy gains when prices rise and causing total losses when prices fall.
(II) James Wynn: The 'roller coaster' of $87 million in profits
At the end of May, James Wynn, who once held $87 million in profits, ended up not only giving back profits due to opening a $1.23 billion BTC long position on Hyperliquid but also losing $21.77 million in principal. Such 'massive naked longs' fundamentally bet everything on 'one-sided perpetual rise', ignoring market volatility — when BTC experiences a 10% retracement, the liquidation risk under high leverage detonates instantly, and the profit bubble bursts.
(III) qwatio: The 'deadly greed' from $3 million to $26 million
Using a principal of $3 million to achieve a profit of $26 million in qwatio, ultimately leading to a liquidation of both principal and profit. This is a typical case of 'addiction to increasing positions with floating profits': continuously increasing leverage when profitable, betting profits again without setting a dynamic stop-loss. When the market turns, the floating profits instantly vanish, and the principal is dragged into the abyss — the essence of high-leverage rolling positions is to gamble 'future profits' against 'current trends'; once the trend reverses, all gains are mere illusions.
II. The 'death formula' of high-leverage rolling positions
These types of liquidation are not accidental but the inevitable result of 'leverage + position control + lack of stop-loss', which can be broken down into a fatal formula:
High leverage (>10 times) × Naked one-sided position (>50%) × No dynamic stop-loss = Liquidation
(I) The trap of leverage
Whales commonly use 10-20 times leverage; at this leverage level, a market fluctuation of 5%-10% can trigger liquidation. Taking BTC as an example, with 10 times leverage on a long position, if the price drops by 5%, the margin is insufficient and directly leads to liquidation — but the temptation of high leverage lies in the fact that a 5% increase can double profits, leading traders into the psychological vortex of 'betting big'.
(II) The gambling nature of naked positions
Opening a $1.23 billion BTC long position (James Wynn), fully betting on a one-sided trend, essentially 'betting that the market will not retrace'. However, the characteristic of the crypto market is 'normalization of volatility', with 32% of days in 2024 experiencing BTC's daily fluctuations exceeding 5%. Such a 'naked run' position is equivalent to handing over fate to random fluctuations; liquidation is just a matter of time.
(III) The absence of stop-loss
These whales have almost set no 'dynamic stop-loss' (such as trailing stop-loss or volatility stop-loss), but rather hope for 'trend continuation'. When the market turns, the transition from profit to loss can be completed in a matter of hours; a position without a stop-loss is like a car without brakes, ultimately plunging off a cliff.
III. Warnings for ordinary traders
This wave of whale liquidations provides all participants in the crypto circle with a 'pitfall avoidance guide', with the core being a return to the essence of trading:
(I) The correct way to open leverage
Leverage strictly ≤ 5 times, and only used when 'trend is clear + volume verifies';
Position controlled at 10%-20% of total capital to avoid 'all in'.
(II) The iron rule of stop-loss
Single trade stop-loss ≤ 2% of total capital, and adopts 'trailing stop-loss' (e.g., if the price rises by 10%, the stop-loss level moves up by 5%);
After making a profit, promptly adjust the stop-loss to the 'cost line' to ensure 'break-even exit'.
(III) Awe for trends
Always remember that 'the market does not have one-sided perpetuals'; reserve 30% of your position in an upward trend to respond to retracements.
When floating profits exceed 50%, gradually reduce positions to lock in profits and avoid 'profit giving back'.
IV. Conclusion: The crypto circle is not a casino; it is a risk management arena.
The liquidations of whales have torn apart the 'illusion of wealth' in high-leverage rolling positions — the crypto circle has never been a casino but a place to test risk management abilities. Ordinary traders should learn from this bloodbath: abandon the fantasy of 'betting big to change fate' and build a trading system with 'low leverage + dynamic stop-loss + position control' to survive in market volatility.
After all, the first rule of survival in the crypto circle is: to survive is to have the opportunity to make money.
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