A common case when the currency circle plummeted: An investor lost US$1.14 million and almost went bankrupt after liquidating his position.

Last weekend (April 12-13), there was a sharp plunge in the cryptocurrency field. Bitcoin fell by nearly 20%, while various altcoins even fell by more than 50%. This was a big blow to some highly leveraged investors. Said it was a devastating blow.

One of the new cases is @Cryptonerd75, a netizen who has been involved in the cryptocurrency field since 2017. He said that he did not even have $1,000 in his bank account, but he had $1 million in his Binance account, which means he put all his belongings on cryptocurrencies.

Cryptonerd75 purchased a meme token called PEPE. If he only purchased the spot, he would only have a floating loss at most and not be liquidated. However, he should have held a long position of 3 times the PEPE contract, so he was liquidated during the large-scale decline. .

The amount lost by Cryptonerd75 in this liquidation exceeded US$1.14 million. Bluedot.com checked the recent rise and fall of PEPE/USDT and found that the two-day decline last weekend was 57.28% compared to the previous high. If the previous highest point is included, the decline was 63.75%.

Although this drop is large, in the currency circle, altcoins, especially meme tokens, are not actually very large. Therefore, the main problem in being liquidated is that the leverage is too high, and they are liquidated when encountering extreme market conditions.

Cases of liquidation like Cryptonerd75 happen all the time in the currency circle, so this new case reminds investors once again not to use leverage as much as possible. If you want to use leverage, it must be at a very low multiple, otherwise the result will be a one-time Sex is liquidated.

Finally, if unfortunately your position is liquidated, don't think too much. You will still have green hills and no need to worry about running out of firewood.

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