Large ETH Trader's $20.73M Loss: How a 75% Win Rate Turned Into Liquidation

On-chain data analyst Yu Jin reported today that a prominent trader with an impressive historical win rate was forced to close all positions after suffering massive liquidation on their ETH short trade. The incident highlights the risks of sustained bearish bets in volatile markets.

The Setup: A Confident Play Gone Wrong

This trader initiated their short position on July 28th with clear conviction. At that time, ETH appeared vulnerable, but the market had other plans. The position showed early promise—by August 3rd, the trader was sitting on an unrealized gain of 12.25 million USD, representing a 25% swing in their favor. For a moment, their 75% historical win rate seemed validated once again.

The Unraveling: When Conviction Becomes Costly

However, ETH refused to cooperate. As the asset continued its upward trajectory, the winning trade transformed into a losing battle. Rather than accepting the mounting losses, the trader kept averaging down, injecting additional capital to maintain the position. Over the 11-day trading period, they committed a total of 20.98 million USD to the trade.

The persistence didn’t pay off. By August 9th, with Ethereum trading around $2.93K and showing continued strength, the position became untenable. The trader ultimately capitulated, unwinding the entire short position and accepting a final loss of 20.73 million USD. After closing all positions, only 250,000 USD remained—a sobering reminder of how quickly leverage and conviction can evaporate.

Key Takeaway

This whale’s experience underscores a critical lesson: even traders with strong historical performance can face devastating drawdowns when market conditions shift decisively against their thesis. The combination of leverage, conviction, and averaging down created a compounding effect that turned early profits into substantial losses.

#ETH #Trading #Liquidation