Machi faces liquidation again with 1,000 ETH, the leverage dilemma behind the $25M loss

According to the latest news, well-known crypto trader Machi (@machibigbrother) experienced his second liquidation event within the past 24 hours. As ETH price declined, his 1,000 ETH position was liquidated, valued at approximately $2.88M. Currently, his total losses have approached $25M, while he still holds 3,750 ETH (worth about $10.84M). The new liquidation price is set at $2,858.32. This series of events highlights risk management issues in leveraged trading.

Full Timeline of the Liquidation Events

Event Sequence

Based on relevant information, Machi’s operations are as follows:

January 23: ETH briefly dips below $2,900. Machi proactively reduces some ETH long positions to avoid liquidation, then deposits 250,000 USDC into Hyperliquid platform to add to ETH longs (at that time holding 4,450 ETH, valued at $12.94M).

January 25: The market continues to decline, Machi faces another liquidation, and 1,000 ETH are forcibly closed.

Market Background

According to relevant info, ETH’s current price is $2,891.59, with recent significant drops:

• 1-hour decline of 1.30%
• 24-hour decline of 1.96%
• 7-day decline of 13.20%
• 30-day decline of 0.99%

This means that over the past week, ETH has fallen from around $3,330 to the current level, a drop of over 13%. For traders holding highly leveraged long positions, this rapid decline directly triggered the liquidation mechanism.

Trading Strategies and Risk Management Dilemmas

Machi’s operational logic

From the timeline, Machi adopts a typical “leveraged long” strategy:

• During price drops, he deposits more USDC to increase his position size
• This approach can yield larger gains during market rebounds
• But during sustained declines, it faces greater liquidation risk

Why did consecutive actions still not prevent liquidation

Although Machi proactively reduced his position on January 23 to lower risk, he still experienced liquidation just two days later. This indicates that:

1. The market decline was faster than expected, dropping from $2,900 further down to below $2,891
2. Even experienced traders find it difficult to fully predict market movements
3. The liquidation price range in leveraged trading is narrow; once broken, it’s irreversible

Data shows that Machi’s liquidation price dropped from $2,841.97 on January 23 to $2,858.32 on January 25, indicating he maintained a relatively aggressive leverage ratio even after forced reduction.

Risks Behind the Numbers

Loss Scale

• New liquidation loss: $2.88M
• Total loss: approaching $25M
• Remaining holdings: 3750 ETH (about $10.84M)

This means Machi’s total loss in this market cycle has reached a significant scale. Even large traders with ample capital and experience have suffered notable losses amid market volatility.

The Double-Edged Sword of Leverage Trading

Machi’s case exemplifies the characteristics of leveraged trading:

• Amplifies gains in upward trends
• Also magnifies losses during declines
• The liquidation mechanism is irreversible; once triggered, it results in forced position closure

Market Trends and Future Focus

Relevant data shows ETH’s 7-day decline of 13.20%, indicating a medium-term downward trend and a cautious market sentiment. Under this context, traders holding high-leverage long positions face ongoing liquidation pressure.

Machi’s current liquidation price of $2,858.32 means that if ETH continues to fall to this level, his remaining 3,750 ETH will also face liquidation risk. From the current price of $2,891.59, there’s about $33 of downside (roughly 1.1% decline).

Summary

Machi’s consecutive liquidation events reflect current market volatility and the risks of leveraged trading. Although this well-known trader took proactive risk management measures (reducing positions on January 23), the rapid market decline exceeded expectations, leading to new liquidations.

This case offers a core lesson for market participants: even with extensive experience and sufficient capital, high-leverage trading requires full respect for market risks. While liquidation prices provide some buffer, rapid market swings can render this buffer insufficient. For ordinary traders, Machi’s experience serves as a clear warning: leverage is a double-edged sword, and its risks are often masked by potential gains.