The Power of Leverage in This Strategy
For this strategy, we are using 25% of our capital—which is $5,000—and applying leverage in a strategic way across three separate positions. The leverage is split as follows:
Position 1: $2,500 on ADA with 5X leveragePosition 2: $1,250 on ADA with 10X leveragePosition 3: $1,250 on ADA with 20X leverage
Each of these positions is targeting ADA (Cardano), one of the most popular cryptocurrencies in the market. The target price for ADA is $2.00, which represents a substantial increase from its current price.
Let’s break down the potential returns for each position and see how leverage maximizes profits.
Position 1: $2,500 on ADA (5X Leverage)
Entry Price: $0.75
Leverage: 5X
Estimated Liquidation Price: $0.61
Amount Invested: $2,500
Coins Purchased: 16,000 ADA
In Position 1, you're using 5X leverage to increase your exposure to ADA with an entry price of $0.75. When you apply 5X leverage, you're controlling a total of $12,500 worth of ADA for your $2,500 investment. You will purchase 16,000 ADA at this price.
Price Target: ADA Reaches $2.00
If ADA reaches the target price of $2.00, the price would increase by 267% from the entry price of $0.75:At this point, your 16,000 ADA will be worth $32,000. Your initial investment was $2,500, so your total profit would be:
Profit = $32,000 - $2,500 = $29,500
This is a substantial gain, and it demonstrates how leverage magnifies profits when the market moves in your favor.
Position 2: $1,250 on ADA (10X Leverage)
Entry Price: $0.63
Leverage: 10X
Estimated Liquidation Price: $0.57
Amount Invested: $1,250
Coins Purchased: 19,000 ADA
In Position 2, you apply 10X leverage, which increases your exposure even more. With a starting position of $1,250, you’re able to control $12,500 worth of ADA, and at an entry price of $0.63, you buy 19,000 ADA.
Price Target: ADA Reaches $2.00
If ADA reaches your target price of $2.00, the price would increase by 317% from the entry price of $0.63:At this target, your 19,000 ADA will be worth $38,000. Your original investment was $1,250, so your profit would be:
Profit = $38,000 - $1,250 = $36,750
This position offers a significant profit, and once again, leverage helps boost the returns, especially with the higher multiplier of 10X.
Position 3: $1,250 on ADA (20X Leverage)
Entry Price: $0.575
Leverage: 20X
Estimated Liquidation Price: $0.55
Amount Invested: $1,250
Coins Purchased: 40,000 ADA
For Position 3, you’re using 20X leverage, which is the highest leverage in this strategy. With this, you’re able to control $25,000 worth of ADA for your $1,250 investment. At an entry price of $0.575, you will purchase 40,000 ADA.
Price Target: ADA Reaches $2.00
If ADA hits your target of $2.00, the price will have increased by 348% from the entry price of $0.575:Your 40,000 ADA will then be worth $80,000. Subtracting your initial investment of $1,250, your profit will be:
Profit = $80,000 - $1,250 = $78,750
This position offers the highest profit, but it also comes with the highest risk due to the increased leverage.
Total Estimated Profit Across All Positions
Now, let’s calculate the total profit you would make across all three positions, assuming ADA reaches $2.00. We already have the following profits:
Position 1: $29,500Position 2: $36,750Position 3: $78,750
So, your total profit would be:
29,500+36,750+78,750=145,00029,500+36,750+78,750=145,000
That’s a $145,000 profit from a $5,000 investment, which is a 29x return on your initial capital. This highlights the power of leverage when used wisely in the right market conditions.
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