Crypto Whale Li Chengpeng Liquidates Long Positions Worth $1.2 Million, Suffers Major Losses

A major crypto trader known as 'Li Chengpeng' executed a $1.21 million liquidation of his HYPE long position on January 19, 2026, suffering a loss of nearly $330,000. The trader, identified by the wallet address 0x020c..., holds remaining long positions in HYPE valued at around $4.78 million, but faces a floating loss of 68.87% and a liquidation price of $18.22. The position remains at significant risk given the large drawdown.

The move follows a broader trend of increased liquidations in the crypto market. Over the past 24 hours, more than $800 million in leveraged positions have been liquidated, with 90.5% of those being long positions. This surge in liquidations has been attributed to rising geopolitical tensions, particularly between the EU and the US.

The EU is reportedly considering tariffs of up to $101 billion in response to US President Donald Trump's proposed tariffs on eight European nations. These trade tensions have sparked a risk-off sentiment among traders, contributing to the recent market downturn.

What Caused the Liquidation Spree?

The EU–US trade war has been the primary driver of the recent market correction. Trump announced a 10% tariff on goods from several European countries, starting February 1, while the EU is considering retaliatory measures. As a result, Bitcoin and other major cryptocurrencies have fallen sharply.

The risk-off environment has led to heightened volatility and margin calls. The largest single liquidation, worth $25.83 million, occurred on the Hyperliquid platform. This underscores the extreme positioning of long traders who have been caught off guard by the sudden shift in sentiment.

What Are the Implications for Traders Like Li Chengpeng?

Li Chengpeng's recent liquidation is emblematic of the broader market distress. The trader has seen his account balance fall from over $100 million to the hundred-thousand-dollar range since reactivating his trading account in October 2025. The drawdown of nearly $330,000 in a single liquidation highlights the risks of holding large leveraged positions in volatile markets.

The incident raises questions about risk management in crypto trading. Many long positions have been overly optimistic, leaving traders vulnerable to sharp corrections. This is especially true in a market environment where macroeconomic factors—such as trade wars—can rapidly shift the mood from bullish to bearish.

How Are Other Markets Reacting to the Shift in Sentiment?

The negative sentiment is not limited to crypto. In equities, Ningbo Ronbay New Energy Technology Co., a producer of cathode materials for batteries, saw its shares drop by up to 20% after the Chinese Securities Regulatory Commission launched a probe into its disclosures about a $17 billion contract with Contemporary Amperex Technology Co. Ltd. The investigation focused on alleged misleading statements about the contract's scope and feasibility.

In contrast, some hedge funds have performed well in 2025, despite the risks associated with investing in China. Bridgewater and Tekne Capital, for instance, reported strong returns from their China-focused strategies, as government stimulus and improved conditions in the tech and AI sectors helped reverse some of the earlier pessimism.

What Are the Broader Market Implications?

The current environment is shaping up to be a test of liquidity and positioning across both crypto and traditional markets. The sharp corrections observed in recent days reflect the fragility of leveraged positions and the impact of macroeconomic uncertainty.

Traders are now more cautious, with the Crypto Fear and Greed Index dropping to 44 from 61, indicating a move toward bearish sentiment. This shift is likely to have knock-on effects for liquidity providers and margin traders who may face further losses if volatility persists.

Investors are advised to monitor trade developments and macroeconomic indicators closely. The ongoing tensions between the EU and US are likely to remain a focal point for risk-off behavior in the near term.