After PEPE plummeted 24%, why does this trader still dare to use 10x leverage to go long with $1.1 million?

According to the latest news, on the afternoon of January 21, a certain swing PEPE trader once again took action, going long on 215,513,963 PEPE tokens with 10x leverage, at an average entry price of $0.0051, with a position size of approximately $1.1 million. Notably, this trader previously closed all three of their swing trades in profit, totaling $54,000 in gains, with a 100% success rate. This time, they chose to go long amid PEPE’s recent sharp decline, and the underlying logic warrants in-depth analysis.

Trader’s Historical Performance

This trader has demonstrated quite stable short-term trading ability. All three of their past trades were closed in profit, which is uncommon in the high-risk crypto market. This consistent success rate indicates that the trader possesses:

• Strong technical analysis skills
• Strict risk management discipline (timely take profit)
• Sharp intuition for swing opportunities
• Effective entry and exit execution

From their trading style, this is a typical aggressive swing trader, accustomed to amplifying gains with high leverage.

Current Market Context

This long position decision occurred within a specific time window. According to the latest data, PEPE has shown significant recent volatility:

This data combination is quite interesting. The sharp decline over 7 days contrasts with the 30-day increase, indicating PEPE experienced a substantial correction recently but remains in an overall upward trend over a longer period. The trader’s long decision may be based on the following considerations:

Technical Analysis

After a 24% drop over 7 days, the market may have already priced in some pessimism. From a 30-day perspective, PEPE still has a 26% gain, suggesting the medium-term trend remains intact. The trader might see this as a good low-level entry point.

Market Sentiment

As a popular meme coin, PEPE’s price movements are often highly correlated with market sentiment. After a correction, as long as sentiment recovers, there could be significant rebound potential.

Risk Assessment of High Leverage Operations

It is important to highlight that this operation used 10x leverage. This means:

• A 10% decline in PEPE’s price would result in a 100% loss on the position
• The current position is already slightly in floating loss
• Any further decline would intensify losses

While high leverage can amplify gains in short-term swing trading, it also magnifies risks. Past success does not guarantee future success, especially under high leverage.

Inferred Trading Logic

Based on the trader’s historical performance and current operation, their trading logic might include:

1. Belief that PEPE has approached a bottom after a 7-day decline
2. Expectation of a short-term rebound opportunity, aiming for quick profits via high leverage
3. Implementation of strict stop-loss points, prepared to close in loss if floating losses exceed a certain threshold
4. Planning to close quickly after profits, continuing their past successful pattern

Summary

This trader’s consecutive long positions reflect a typical swing trading approach: seeking rebound opportunities after technical adjustments, amplified by high leverage. Their 100% success rate is indeed noteworthy, but it also means the market is closely watching their moves. Future observation will be needed to see whether this operation can continue their past success or serve as a cautionary example of high leverage risks. For ordinary investors, such traders’ behaviors can serve as indicators of market sentiment, but directly copying their strategies should be approached with caution, as high leverage is a double-edged sword.