Recently, a large whale lost around 29 million dollars on a leveraged position. The price move itself was not unusual. What caused real damage was leverage combined with low liquidity.
From my observation, leverage is not the enemy. The real problem starts when traders ignore market depth. In an illiquid market, even a single large position can move price against itself. Exiting becomes difficult and losses grow faster than expected.
Liquidation rarely happens alone. One forced close pushes price lower, which triggers more liquidations. This creates a chain reaction that feeds on panic. Once it starts, controlling it is extremely hard.
What stands out the most is that size does not protect anyone. Even whales get wiped when risk is mismanaged. The market does not care how experienced or capitalized you are.
In some cases, automated liquidation systems add more pressure because they focus on closing positions, not on minimizing market impact.
My key takeaways are simple.
I will use leverage only when liquidity supports it.I will always leave room for volatility.A big position is not the same as a safe position.
Survival matters more than fast profits.The market will always offer new opportunities.
Capital, once lost, is much harder to recover.
Trade safe and think long term.