Huang Licheng lost $4.16 million this week, with total losses surpassing $24.5 million. When will the high leverage dilemma reach a turning point?

Huang Licheng’s journey in contract trading is experiencing a continuous “Waterloo.” According to the latest news, this trader, who previously profited from NFT trading, lost another $4.16 million on Hyperliquid this week, pushing his total profit and loss to a new low of -$24.5 million. From an account size exceeding hundreds of millions of dollars to now experiencing consecutive massive losses, his story is becoming a typical case of high leverage trading risks.

Accelerating Deterioration of Continuous Losses

Rapid decline from peak to trough

Huang Licheng’s account shrank from over a hundred million dollars to the tens of millions level in less than three months. According to relevant information, he became active in contract trading starting October 2025, but since then, he has been caught in a series of continuous drawdowns.

The $4.16 million loss this week is just the latest data point, but recent trading records show this kind of loss is systemic:

• On the morning of January 20, he opened an 11 BTC long position at $92,858, and a short-term operation resulted in a loss of $22,000
• Between January 19 and 20, the HYPE long position had an unrealized loss of 85%, ultimately closing with a loss of $560,000
• On January 19, the overall account had an unrealized loss of $1 million on longs, after previously having an unrealized profit of $1.3 million
• On January 20, due to market declines, he faced five liquidations, with total losses expanding to $24.18 million

This is not a single mistake but a sustained, systemic loss pattern.

The cost of high leverage strategies

Huang Licheng’s trading style has several obvious characteristics:

Such strategies may yield good returns in a rising market, but once a decline occurs, they can trigger a chain reaction. During the nearly 7% decline in ETH over the past week, his 25x leveraged long position had an unrealized loss of $260,000. The drop in HYPE was even larger, resulting in an unrealized loss of $480,000 on his 10x leveraged long position.

Current Danger Zone

Position risk remains high

Although Huang Licheng has closed some heavily losing positions (such as HYPE), he still holds a significant high-risk position. According to quick reports, he currently holds $1.7 million in ETH longs, with an unrealized profit of only $6,800.

This appears to be a floating profit, but more detailed data from relevant information shows his ETH long position as follows:

• Position size: approximately $40.83 million (as previously mentioned)
• Average entry price: $3,234
• Liquidation price: $3,110
• Current ETH price: $3,003.18

This means he has less than 1% room before liquidation. Based on the latest position data, the $1.7 million long position has an unrealized profit of $6,800, indicating he may have already taken partial stop-loss positions to lower the liquidation price.

Reality of account shrinkage

From over a hundred million dollars to a loss of $24.5 million, the account has shrunk to the tens of millions level. Given the current loss rate (this week’s $4.16 million), if this continues, the account size will continue to rapidly diminish.

Reflection on Trading Style

Huang Licheng’s trading record reveals several issues:

• Lack of stop-loss awareness: Many positions are closed only after unrealized losses of 30%-85%, indicating unreasonable stop-loss settings
• Overconfidence: Holding multiple high-leverage longs simultaneously without proper risk diversification
• Chasing rallies and selling dips: Recent high-frequency short-term operations show emotional trading characteristics
• Lack of flexibility: Maintaining aggressive leverage and positions despite ongoing losses

This contrasts sharply with his earlier steady style of profitably trading blue-chip NFTs. After entering contract trading, he seems to have adopted a completely different strategy.

Future observations

Based on current positions and risk proximity, several points to watch:

• Whether ETH can hold above the $3,110 liquidation price, which directly affects whether he will face another liquidation
• Whether he will continue to reduce positions to further lower risk or stick to his current stance
• The speed of further account shrinkage and whether he will choose to pause trading

Summary

Huang Licheng’s case provides a clear warning: even those who have previously succeeded can quickly turn sour in high-leverage contract trading. The $4.16 million loss this week and the total loss of $24.5 million reflect not only market volatility but also failures in trading strategy and risk management.

From over a hundred million dollars to now experiencing consecutive massive losses, he has completed a transition from peak to trough in less than three months. Currently holding high-risk positions with less than 1% room before liquidation, the subsequent market movements will be a life-and-death test for his account. The outcome of this story depends on his next choices and whether the market gives him a chance.