What is liquidation?

Suppose Bitcoin is $50,000 each, and you spend $50,000 to buy one; this is a regular transaction.

Leveraged trading means you still buy one Bitcoin, but only need to put up 10%, which is $5,000, while the remaining $45,000 I lend you, creating a tenfold leverage. If Bitcoin rises by 10% to $55,000 and you sell, after repaying me the $45,000, you net a profit of $10,000. This means your $5,000 principal has doubled. Of course, if Bitcoin falls to $45,000, you'll face a problem: the remaining value is only enough to repay the money I lent you.

So, even though it only dropped by 10%, with tenfold leverage, your own $5,000 is essentially lost. At this point, you say you're sure the price will go back up, and you won't sell, you'll hold on. Is that okay? #幣圈觀察