A major cryptocurrency investor is reducing leverage ahead of closing a risky position

An incredible story of risk and recovery unfolds in the cryptocurrency markets, where an experienced trader was forced to execute emergency leverage management tactics to avoid complete liquidation. According to ChainCatcher research, a major market participant found themselves in a critical situation after radical price swings in Ethereum over the past few days.

From Profits to a Critical Market Crisis

Chain analysis shows that on January 27, the investor made a massive purchase—executing a trade for 148,000 ETH at an average price of approximately $2,883 per coin, using borrowed leverage. The total value of this position was about $426 million. However, their assumption of market stability proved to be false.

Just three days later, the situation changed sharply. Ethereum’s price dropped to around $2,200, leading to a liquidity shortfall on the Hyperliquid platform and partially liquidating the investor’s position. During this time, the whale lost approximately $230 million. More critically, remaining positions approached the liquidation threshold on the blockchain.

Tactical Retreat: Reducing Leverage and Defusing Risk

Realizing the severity of the situation, the investor began actively managing their leverage over the past two days. The whale sold about 50,000 ETH for a total of approximately $112.8 million to reduce debt load. This strategic sell-off aimed to lower the liquidation price from the critical level to around $1,600.

As of today, current monitoring data shows the investor’s position includes approximately 33,000 BTC and 748,000 ETH. The combined value of these assets is about $4.213 billion at current prices (ETH trading around $2,050, BTC near $68,810).

Lessons for the Market: When Leverage Becomes a Trap

This case demonstrates the critical importance of risk management when using leverage. Even experienced market participants can find themselves in danger during sudden price fluctuations. The investor’s quick action to reduce leverage prevented potential full liquidation but highlights the volatility and uncertainty inherent in cryptocurrency markets.