Based on my trading experience in the cryptocurrency market, the primary reason people lose money in a bull market, is using leverage.
Let's consider an example where an individual buys Bitcoin in the spot market at $25,000 and holds it until it reaches $73,000. While many people might sell it at $30,000, buy back at $35,000, then sell again at $37,000, and so on, the ideal return on investment (ROI) is 292%. However, if he suddenly becomes interested in futures trading and starts with 5x leverage, he might initially catch a 5% increase, yielding a 25% profit. But the following day, he incurs a 10% loss in the morning and decides to increase his leverage to 10x to try to recover his losses more quickly. Unfortunately, he then loses 15%. In a desperate attempt to recoup all losses within the same day, he increases his leverage to 100x. Within an hour, a 1% price drop triggers the liquidation of his long position, erasing all his profits in a single day.
So, friends, remember this: never use leverage—not even 2x, as it might tempt you to escalate to 125x the following week. Stick to the spot market.
Your emphasis on the dangers of leverage and the value of trading in the spot market provides a crucial perspective for traders at all levels, especially those new to the cryptocurrency space