The analysis is interesting, and I think you have identified correctly one of the sources of Bitcoin's volatility. But I disagree about the solution you propose.
In my opinion, only because of this Bitmex incident it would be wise to limit the widely available throughout the ecosystem high leverage to stop this absurd volatility and give a chance to BTC to be this safe haven finally!!!
Unfortunately, there is nobody who can really "limit the leverage". Even if there was a worldwide recommendation by the FSB or a similar body, and exchanges had to abid them, nobody would prevent people to set up DeFi-style contracts in the same way.
I think the big problem is that Bitcoin even without the side effects of "modern" trading (like liquidation algorithms) tends to volatility. This is mainly because of its almost purely speculative usage. Let's face it: most Bitcoin "investors" want to buy in cheap and later sell high - to fiat. This "hoard and sell" mentality is what creates the dramatic up- and downswings. And these swings are also the reason for the atractiveness for leveraged trading. If you see that Bitcoin in most years has at least a 50% change in price (it doesn't matter if it's upwards or downwards) then your tentation is big to "try your luck" and "ride the waves".
Only increased liquidity, which is most easily achieved by more offers of goods and services, will solve that problem in the long run.