Key Takeaways:
A Bitcoin trader has booked a $1.94 million loss on a single short position, a misstep that completely erased $1.71 million in profits accumulated over 11 prior successful trades. The event highlights the extreme risks of leveraged trading in a volatile crypto market.
On-chain data provider Lookonchain first reported the trade on May 5, 2026, identifying the wallet address 0x004e as the party that closed the 700 BTC short. The total value of the position was $56.68 million. "This single misfire wiped out all profits from his previous 11 winning BTC shorts," Lookonchain noted in a social media post.
The massive loss occurred during a significant market rally where Bitcoin’s price jumped 5.7% to $74,679. This sharp upward movement triggered a classic short squeeze, liquidating an estimated $540 million in short positions across major derivatives exchanges, according to data from Coinglass. The trader’s loss exemplifies the transmission chain of a macro-driven squeeze: a broad market rally forces traders who bet against the price to buy back the asset at a higher price to cover their positions, which in turn pushes the price even higher.
This event serves as a stark reminder of the high-stakes nature of cryptocurrency derivatives. While some traders accumulate significant gains, as another wallet holding 455 BTC and 16,325 ETH currently sits on a $1.96 million unrealized profit, a single oversized, leveraged position can lead to catastrophic losses. For the trader known as 0x004e, a string of consistent wins was undone in a single trade, underscoring the importance of risk management.
This article is for informational purposes only and does not constitute investment advice.
