A Bitcoin trader saw 11 consecutive winning short trades—worth $1.71 million in profits—completely wiped out by a single ill-timed liquidation of a 700 BTC short position on May 5, resulting in a $1.94 million loss. The incident highlights how overconfidence and improper risk management can devastate even highly successful trading streaks.
The Trade That Broke the Streak
According to on-chain data, wallet address 0x004e closed a 700 BTC short position valued at approximately $56.68 million on Tuesday, May 5, incurring a $1.94 million loss. This single losing trade erased the entire $1.71 million profit accumulated from 11 prior winning short positions. The net result across all 12 trades was a deficit of roughly $230,000.
The 11 profitable shorts each generated an average profit of about $155,000. The final trade, however, produced a loss nearly 12 times that average, indicating a dramatic increase in position size—a classic sign of overconfidence after a winning streak.
The Psychology Behind the Disaster
This pattern is well documented in trading psychology: consecutive wins breed overconfidence, encouraging traders to amplify their exposure at the worst possible moment. In the leveraged crypto market, such mistakes are permanently recorded on-chain, allowing anyone with basic analytical skills to review and learn from them.
Mathematically, the trader’s overall failure stems from a ‘win small, lose big’ approach. While the win rate was high (11 out of 12), the magnitude of the loss far outweighed the cumulative gains. This underscores that risk control—not just win rate—determines long-term success.
Bitcoin’s Short Squeeze Trigger
The forced liquidation was triggered by a sharp rise in Bitcoin’s price above $81,000, driven by multiple factors. First, spot Bitcoin ETF inflows reached $2.44 billion in April—the strongest monthly institutional buying since October 2025. Fidelity also added $19 million to its FBTC product, snapping a three-day outflow streak and confirming renewed institutional interest.
Additionally, easing geopolitical tensions (including Iran-related developments) and macro-positive news such as Trump’s “Project Freedom” helped propel Bitcoin to its highest level since January. The rally triggered a cascading short squeeze, forcing leveraged short sellers—including wallet 0x004e—to cover positions at a loss as the price broke key resistance levels.
Key Takeaways for Traders
This case serves as a powerful reminder: in the high-leverage world of crypto trading, even a string of wins can be undone by one oversized mistake. Proper position sizing, stop-losses, and humility are essential. As the saying goes, “the market can remain irrational longer than you can remain solvent.”