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Just in case that explanation wasn't clear enough, if you bought 1 BTC at a 2X leverage when BTC was $10k in October last year and rode it all the way up to $65k and you had something like $120k BTC at that point, would you then have been liquidated when BTC dropped over 50% to $29k or would your BTC have just gone down to the same as it would have been at $29k on the way up?
Is it possible that somebody could confirm which of these is correct please?
Thanks
Because when you enter, you basically borrow 50% of your capital in usd to buy 1 btc (eg you use 2x leverage), then the liquidation benchmark is the same as the position when you enter. That is, you will be liquidated if the btc hits $5k.
BTC @$10k = $5k yours and $5k from the broker. So it doesn't matter what the percentage increase in btc is, because here you don't bear the liquidation of 1 btc, but 5k usd.
cmiiwThank you for the explanation, that's what I had always assumed but then I got a little concerned when I thought it could run the other way. In that case I suppose if you were lucky enough to buy a leveraged position towards the start of this bull run, say October last year for $12k then you could quite comfortably just sit on that and hoddle it safe in the knowledge that you are unlikely to ever be liquidated unless something goes drastically wrong with Bitcoin.