Whale loses $1.04 million and closes 242 BTC positions, a risk signal behind the market decline

On January 20th at 13:47, a certain whale closed a long position of 242 BTC, realizing a loss of $1,042,000. This transaction occurred amid a sustained adjustment in the crypto market, reflecting the risks of high leverage trading during market volatility. Notably, the whale is still long XYZ100 (an on-chain product tracking the NASDAQ 100) with 20x leverage, with an average entry price of $25,144.79, continuing to bear a high-risk exposure.

Market Background: Why Did This Loss Occur

This liquidation is not an isolated event but part of a broader market correction. According to the latest news, the crypto market experienced a sharp decline on January 19th, with BTC dropping to about $92,000 and Ethereum falling below $3,200. This decline triggered over $800 million in long liquidations, setting a new record for the year.

The main reasons for the market downturn include:

• Escalating geopolitical risks, with former US President Trump announcing new tariffs on European countries
• Funds flowing into safe-haven assets like gold, increasing risk aversion
• Total cryptocurrency market cap decreased by 2.8% to $3.217 trillion, echoing weakness in traditional stock markets

Whale Operation Analysis: Stop Loss or Forced Liquidation

Details of the Loss

Key data points of this transaction:

Calculating based on 242 BTC, the average loss per BTC is approximately $4,305. This loss magnitude indicates that the whale’s entry cost was significantly higher than the current price, suggesting a long position established at a higher price level.

Risk Exposure Still Exists

More concerning is that after liquidating the BTC long position, the whale remains long XYZ100 with 20x leverage. This implies:

• The whale has not fully hedged risk but has shifted to another high-leverage position
• 20x leverage means a 5% price decline could trigger liquidation
• Given the current high market uncertainty, this operational strategy carries considerable risks

Other Signals in the Market

From other whale activities, market participants’ attitudes appear divided:

• An “on-chain retail whale” has reduced BTC shorts while accelerating positions in on-chain stocks and gold, with holdings reaching $24.3 million
• This whale is shifting from high-leverage crypto assets to relatively stable assets like on-chain stocks and gold
• Reflecting institutional-level risk management strategies in the current market environment

Summary

The whale’s liquidation reflects the market’s adjustment pressure under geopolitical risks. A loss of $1.042 million, while not huge for a major player, signals several important points:

• Vulnerability of high-leverage trading during market volatility: even well-funded whales can be forced to cut losses when the market turns
• Declining market risk appetite: the shift by whales into defensive assets indicates a reduction in risk exposure
• The double-edged nature of leverage products: they can amplify gains but also losses; caution is needed in the current environment

Going forward, attention should be paid to whether similar liquidation waves will continue and whether the market can find a new equilibrium after the $1.042 million loss.