The cryptocurrency market is highly volatile, and even experienced "whales" can face significant losses. The well-known crypto trader James Wynn encountered such an event. Due to a sudden rebound in BTC price, his short position worth 1 billion dollars was forced to close within just six minutes, resulting in an actual loss of over 15 million dollars.
Whale Closes Short Position, Losing Over Millions of Dollars
According to on-chain data analyst Yu Jin's monitoring, James Wynn closed his 1 billion dollar BTC short contract between 6:09 and 6:15 AM Beijing time on May 25, 2025. It is reported that Wynn had opened a short position of 9,402 BTC using 40x leverage at an average price of $107,069 the previous day.
However, with the news of Trump's temporary suspension of EU tariffs, BTC price began to rebound on the 25th morning, prompting Wynn to quickly decide to cut losses. The closing was completed within six minutes, causing a loss of $15.86 million.
Double-Edged Sword of High-Leverage Operations
Notably, this massive short position was established shortly after James Wynn closed his previous long position worth approximately 1.2 to 1.25 billion dollars. That long position reportedly resulted in a loss of about $13 million due to market decline. Quickly shifting from a massive long position to an equally sized short position demonstrates his rapid market direction adjustment, but also highlights the enormous risks associated with using 40x high leverage in a volatile market. High leverage makes positions extremely sensitive to price changes, easily triggering forced liquidation and causing significant losses when market trends contradict expectations.
Short Squeeze
James Wynn's rapid closure of his large short position had an immediate and significant impact on the BTC market. The buying operations for closing positions created strong upward price momentum, causing BTC price to surge by about $800 within minutes. This massive short covering triggered a "short squeeze", further driving up the price and leading to a roughly 3.2% increase in BTC within 24 hours. Simultaneously, market volatility and trading volume increased significantly, reflecting enhanced market activity.
CoinGape data shows that trading volume on major exchanges surged 18%, reaching about $42.3 billion. After this event, market sentiment may shift, particularly with derivatives market funding rates potentially turning positive, indicating an increased bullish tendency. James Wynn's actions were also viewed as an important market signal by other traders, prompting them to reassess their strategies and risk exposure.
For all market participants, risk management should always be the priority. In high-volatility environments, leverage should be used cautiously, and market dramatic changes should be approached carefully. Such liquidation events are closely monitored market indicators, showing that large short position closures can be key catalysts for short-term bullish momentum, increased market volatility, and changes in trader psychology.
