Trader clears 3,000 WETH and only makes 30,000 in profit; once had an unrealized gain of 2.87 million—why didn't they take profit?

A swing trader experienced a “rollercoaster” on WETH: from a peak unrealized profit of $2.87 million down to a bottom-line profit of only $30,000. This is not an isolated case but a common greed trap in the crypto market.

Complete Failure Timeline

According to the latest news, on November 24, 2024, on-chain trader nemorino.eth began building a position, buying 9,043 WETH at an average price of $3,085. This investment peaked in mid-January — with unrealized gains reaching $2.87 million — but the trader chose to hold.

By the afternoon of January 20, the market started to correct. Under downward pressure, the trader was forced to liquidate 3,000 WETH, realizing only $30,000 in profit. He still holds 4,089.83 WETH, with an unrealized loss of about $472,000.

Key Data Comparison

What does this failure reflect?

Lack of Take-Profit Strategy

The most obvious issue is that the trader did not execute any take-profit orders when unrealized gains reached $2.87 million. This is not a small number — at a cost basis of $3,085, this unrealized profit is about 99% of the invested capital, which is already a significant gain.

But the trader chose to hold on, expecting further increases. This greed-driven mentality is common in crypto markets but often comes with huge costs.

Market Correction Impact

WETH dropped 7.12% in the past 24 hours and 11.02% over the past 7 days. During this decline, the trader’s unrealized gains kept shrinking, ultimately forcing a liquidation during the downturn. This is a typical “high position not sold, forced to sell at a low” passive scenario.

Risk Management Flaws

This trade lacked a clear take-profit and stop-loss plan. If the trader had set a take-profit point (e.g., partial exits at $2 million or $1.5 million unrealized gains), he wouldn’t be in this predicament.

Current Market Context

As the most important derivative on Ethereum, WETH is currently in a correction phase. Data shows WETH’s market cap is $1 billion, with a 24-hour trading volume of $171 million. The price has fallen from its peak to $2,962, down 3.98% from the entry cost of $3,085.

This trader’s failure also reflects increased market risk — the level where he once unrealized $2.87 million now marks the starting point of unrealized losses.

Lessons from this Case

This is not just a story about a trader but a reflection of market psychology. I believe there are at least three key points:

First, taking profits is more difficult than setting stop-losses. Stop-losses are driven by fear, but taking profits requires overcoming greed, which tests a trader’s discipline.

Second, unrealized gains are not equivalent to real profits. No matter how large the paper profit, it can vanish at any moment without closing the position. This trader’s move from $2.87 million unrealized profit to $470,000 unrealized loss was entirely due to not locking in gains timely.

Third, forced liquidation during market corrections is often very painful. If the trader had sold at a strategic point, profits could have been much higher. Forced exits usually happen when the market is unfavorable, and prices are less ideal.

Summary

This WETH trader’s story, from $2.87 million unrealized profit to $30,000 realized profit, then to $470,000 unrealized loss, vividly illustrates the greed trap in crypto trading. The key lesson is that clear take-profit plans and disciplined execution are often more important than trying to predict market movements. When unrealized gains reach a certain scale, partial profit-taking is not conservative but protective. With WETH currently in a correction phase, this case serves as a warning that all traders should reflect upon.