High-Leverage Disaster: Crypto Trader Plunges Into Losses, Risks Liquidation on $34M Shorts

Source: CryptoNewsNet Original Title: High-Leverage Disaster: Crypto Trader Plunges Into Losses, Risks Liquidation on $34M Shorts Original Link: One of the most notable on-chain crypto traders, known with the address 0xFC78, has had his fortunes crucially reversed due to suffering two recent high-leverage trades. The previously popular trader had amassed more than $1.78 million profits, having a 9-trade winning streak. Nonetheless, recent missteps wiped those gains entirely (and even sent him $117,000 under his principal).

The 9-win streak trader 0xFC78 has now lost his last two trades, wiping out all $1.78M+ in profits and even dipping $117K into his principal. He now seems to be revenge trading, opening a 30x short on 200 BTC ($18.75M) and a 20x short on 5,000 ETH ($15.26M).

Revenge Crypto Trading Sparks Aggressive Short Positions

Rather than stepping back, 0xFC78 seems to have gone full-scale revenge trading, doubling up with huge leveraged short-sale positions. According to on-chain data, the trader carried out:

• A short of 30x 200 BTC worth $18.75 million USD.
• A 20x short on 5,000 ETH worth $15.26 million

These positions combined put in excess of $34 million at risk, which is compounded by high leverage ratios that would greatly augment liquidation risk.

Unrealized Losses Already Mounting

The unrealized PnL of the trader is:

• BTC short: -$12,600
• ETH short: -$12,493

Although these figures cannot be considered significant when compared to the huge position sizes, even the movement of 1-2% against position can provoke forced liquidations, as leverage is great.

The overall unrealized loss of the trader in the combined portfolio is indicated as -$25,093 and his equity dropped to about $1.81 million.

Liquidation Prices Alarmingly Close

The survival of the crypto trader depends on the lack of volatility in the market that can drive the prices to the liquidation levels, which are alarmingly low:

• BTC liquidation price: $94,721.61
• ETH liquidation price: $3,229.41

These liquidation levels do not provide much breathing room, given that both Bitcoin and Ethereum have exhibited unstable intraday movements in the current market condition.

Even a small increase in any of the aforementioned assets may cause liquidations in a domino effect, resulting in millions lost in a few minutes.

Crypto Market Watches Closely as Trader Faces Critical Hours

The crypto community is keenly watching the wallet since it is on the brink of another big crash. Whales that are highly leveraged tend to affect the derivatives markets, and large positions such as these can have significant market impact.

The phenomenal growth and prompt fall of the crypto trader 0xFC78 is a warning against the dangers of high leverage trading and revenge-based trades made with emotions. What started as an incredible streak of success has now become a high-stakes game that may wipe out the rest of his capital.

It all now depends on whether the crypto trader will recover or be forced into liquidation—this is all determined by the direction of the market and a fair share of good fortune.