Whale Investor Shorts BTC and ETH, Facing Over $6.37 Million in Unrealized Losses

A whale investor recently faced significant losses from short positions in Bitcoin and Ethereum, with unrealized losses totaling over $6.37 million. The move came as the market experienced a rebound, causing many short positions to be liquidated. The broader context includes a challenging start to 2026 for crypto markets, with ETFs shedding most of their January gains.

Bitcoin and Ethereum exchange-traded funds (ETFs) have lost nearly all of their 2026 gains, according to a report by CoinShares. The funds lost $1.3 billion in collective inflows since the start of January during a four-day losing streak. Bitcoin ETFs alone saw $405 million in outflows last week, indicating bearish sentiment.

On Hyperliquid, six traders were liquidated with losses exceeding $1 million on January 14. Four of them held BTC short positions, with losses ranging from $1.294 million to $5.8227 million. One trader with an ETH short position lost $2.4714 million, while another with a SOL short position faced a $4.7641 million loss.

Why the Move Happened

The market rebound that led to these liquidations was driven by several macroeconomic factors. The U.S. Supreme Court ruled on the legality of tariffs imposed by the Trump administration, introducing uncertainty into markets. Additionally, expectations of Federal Reserve rate cuts diminished, with futures data showing a 72.7% chance that rates will remain unchanged in March, down from earlier estimates.

Bitcoin's failure to hold above $92,000 also contributed to the market's bearish tone. The price retreated to $90,000 after a brief attempt to sustain higher levels. Geopolitical concerns, including Trump's 25% tariff on countries trading with Iran, added to the risk-off sentiment.

How Markets Responded

The market response was evident in the outflows from crypto ETFs and the performance of altcoins. While Bitcoin and Ethereum saw outflows, altcoins like XRP, Solana, and Sui attracted inflows of $45.8 million, $32.8 million, and $7.6 million, respectively.

Ethereum's price hovered around its $3,100 max pain level, and Bitcoin was near its $90,000 max pain. The combined value of expiring options on Deribit reached $2.2 billion, creating a standoff as traders awaited resolution.

What Analysts Are Watching

Analysts are closely monitoring the upcoming U.S. nonfarm payroll report and the potential impact on the dollar. Sticky wage growth in the jobs data could complicate the Federal Reserve's inflation outlook and push yields higher. Conversely, softer job gains and moderating wages could support expectations for policy easing.

Investors are also watching the volatility in the crypto market, particularly around major macroeconomic events. With options pinning prices in the short term and macro signals unresolved, traders are adopting defensive positioning. Directional clarity is expected to emerge after options expiry and the release of key economic data.