Golden Finance reports that against the complex backdrop where the cryptocurrency market is in a state of panic due to Israel’s crackdown on the geopolitical conflict in Iran and the abolition of SEC rules, another major piece of news has hit the market – trader Aguila Trades is executing the complete liquidation operation of its 20x leveraged BTC long position. This operation has caused a huge loss of more than 11.7 million US dollars.
According to the monitoring of on-chain analyst Yu Jin, Aguila Trades has embarked on the path of closing positions since 4:30 a.m. As of now, its position has been significantly reduced from the initial size to 121 million US dollars. However, the remaining 1,157 BTC long positions are still being liquidated with difficulty through the TWAP (Time-Weighted Average Price) strategy, and it is expected that it will take another 7 hours to complete the full liquidation. Data shows that Aguila Trades has lost 11.72 million US dollars in this long BTC operation.
The occurrence of this margin call incident is closely related to the recent sharp fluctuations in the cryptocurrency market. After Israel officially announced its crackdown on Iran, the risk-averse sentiment in the global financial market rose sharply, and the cryptocurrency market was the first to be targeted by capital selling. The price of BTC has dropped sharply, breaking through key support levels, putting significant margin pressure on investors holding highly leveraged long positions. The 20x leveraged BTC long position held by Aguila Trades is like a flickering candle in the wind during the downward trend of the market. A slight mistake could trigger a margin call crisis. Once the market price trend is contrary to the direction of the position held, the amplification effect of leverage will rapidly erode the investor’s principal, eventually leading to huge losses.
From the perspective of traders themselves, highly leveraged trading inherently involves extremely high risks. Although leverage can magnify returns when the market is doing well, it can also accelerate losses when market volatility intensifies and the trend reverses. Aguila Trades chose to go long on BTC with 20 times leverage, perhaps based on an optimistic judgment of the market trend. However, in the complex and volatile cryptocurrency market, any minor unexpected factor could disrupt the original market pattern. The outbreak of geopolitical conflicts exceeded the expectations of many investors. The sharp market fluctuations triggered by this force majeure factor instantly rendered seemingly reasonable trading strategies ineffective.
The margin call incident of Aguila Trades has had multiple impacts on the cryptocurrency market. On the one hand, it has intensified the panic in the market. In a market that is already fragile, the liquidation of large positions often triggers a chain reaction. Other investors may, out of concern for similar risks, sell off their crypto assets one after another, further pushing down prices. On the other hand, for cryptocurrency trading platforms, such large-scale liquidation operations may have a certain impact on the liquidity and stability of the platforms. The platform needs to handle a large number of transaction orders to ensure the smooth progress of the liquidation process. Otherwise, problems such as transaction lag and delay may occur, affecting the user experience.
For all participants in the cryptocurrency market, the margin call incident of Aguila Trades is undoubtedly a warning. When conducting cryptocurrency trading, especially when it involves high-leverage operations, investors must fully recognize the risks and uncertainties of the market, reasonably control their positions, and take effective risk prevention measures. At the same time, closely monitor factors such as the global macroeconomic situation, geopolitical dynamics, and changes in regulatory policies, as all these factors may have a significant impact on the cryptocurrency market. In the current market environment full of uncertainties, cautious decision-making and rational investment are the keys to survival and development in the cryptocurrency market.
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