100x Leverage Backfire: An ETH Whale Goes from $43 Million in Floating Profit to Margin Call Zero in a Bloody 72 Hours
The Ethereum market's leverage killing machine has just completed a bloody harvest. A whale investor started a deadly gamble with a principal of $125,000: in the first round of 100x leverage long, they achieved $3.5 million in floating profit, but driven by greed, they reinvested all profits into the second round of rolling positions. When the ETH price soared to $4,837, their paper profit reached $43 million, but the single-day plunge of 8.7% on August 26 instantly broke the risk control bottom line. Due to not setting a stop loss and maintaining 100x leverage, a mere 1% reverse price movement triggered a liquidation, leaving only $70,000 in the account. This tragedy exposes the ultimate paradox of leveraged trading—$43 million in floating profits is merely temporary debt stored by the market, further triggering a chain liquidation of 37 following addresses on-chain, propelling ETH's 23% drop that day.
The bloody lesson has carved three iron rules for all leveraged traders: first, leverage multiples must be anchored to volatility (the reasonable upper limit for ETH is 33 times, not 100 times); second, profits must be withdrawn in stages, treating unrealized profits as margin is akin to building a castle in the air; third, dynamic stop losses should be based on a 5-day moving average plus 3 times volatility. This incident has unveiled the cruelest truth of the crypto market—under extreme leverage, black swans will ultimately devour all floating profits. When the rolling position strategy meets extreme volatility, account balance reaching zero is just a matter of time. The $70,000 debris left by that whale on-chain has become a bloody monument for all speculators.
