I recently stumbled across a whale trader who opened two insanely leveraged longs on a decentralized perpetual protocol. The liquidation levels of his wallets were set at 1830 for ETH and 27668 for BTC. A 2% move down would liquidate the BTC position, which is a whopping $13M! A mere $40 move down on ETH would also liquidate the wallet.
The trader must have a lot of confidence in this trade, or they know something that others don’t. It’s also possible that the whale is using a delta-neutral strategy of longing on-chain and shorting on a centralized exchange.
It’s hard to say which of these scenarios is more likely, but all signs are pointing to this trader being a degen, lighting their money on fire. You can follow the mentioned wallet here.
Leverage trading isn’t for everyone, and it’s easy to imagine the consequences of such a risky move. If BTC were to flash crash to $27,660 and then back up to $28,000 in a matter of seconds, the whale would still make 100$ from the long. It’s unimaginable for the average person how much money some people have or earn in an hour.
Setting some buy orders just below the trader’s liquidation price is one way to take advantage of this situation. Of course, this is a risky move, and I wouldn’t advice it to anyone. The whale is likely to fuck up one day, and the best we can do is hope it’s not today.