Bitcoin Trader Loses $8.2 Million in Leverage Collapse

A major cryptocurrency trader, often referred to as a whale, has suffered significant losses after a leveraged long position collapsed in the ARC perpetuals market on a decentralized derivatives platform.

The incident occurred when the trade began to unwind due to a sharp decline in price, triggering auto-deleveraging. This mechanism is designed to reduce exposure and protect liquidity providers from excessive losses.

According to reports, the whale lost $8.2 million in the collapse of the ARC perpetuals market. However, the loss was contained thanks to risk controls and open interest caps implemented by the exchange.