Bitcoin, Whales Bet on Decline Despite Rebound... "$13 Million Loss on 1,000 BTC Short"

▲ Bitcoin (BTC), Cryptocurrency Decline/AI Generated Image

As Bitcoin (BTC) rebounded by approximately 40% from its February low, a large trader maintaining a 1,000 BTC short position recorded an unrealized loss of about $13 million. However, the trader continues to hold the short position, and some analysts have raised the possibility of a correction to the $71,000 range.

Cointelegraph reported on May 12 (local time) that a trader known as ‘pension-usdt.eth’ holds a 1,000 BTC short position worth approximately $81 million with 3x cross-leverage. This position was opened when Bitcoin was trading at $67,990, and after Bitcoin rose to around $81,000-$82,000, the unrealized loss approached $13 million.

This trader also holds an Ethereum (ETH) short position. According to Cointelegraph, he is also maintaining a 20,000 ETH short position worth approximately $46.1 million, bringing the total bearish bet across Bitcoin and Ethereum to over $127 million. While funding profits from both positions exceeded $125,000, this amount is significantly less than the total unrealized loss.

The trader is gaining attention due to their high past win rate. Lookonchain stated in an April post that pension-usdt.eth once achieved 20 consecutive wins and had a win rate exceeding 85%. However, even as losses expanded with the current Bitcoin rebound, the trader continues to hold the short position and has expressed that the trade is valid.

In technical analysis, the area around $82,430 has been identified as a key resistance zone. This price point represents an overlap between the 200-day simple moving average and the upper boundary of a rising wedge pattern, indicating that Bitcoin is showing signs of weakening upward momentum at this level. Cointelegraph reported that if the rising wedge pattern resolves downwards, Bitcoin's downside target could be around $71,500, in which case the unrealized loss on the trader's 1,000 BTC short position would decrease to approximately $3.5 million.

Analyst Crypto Kid argued that past instances of Bitcoin being rejected at the 200-day simple moving average were signals of a long-term bear market. He explained that in the two most recent occurrences of this retest at the same point in Bitcoin's 4-year cycle, an average decline of 68% followed. Cointelegraph reported that if a similar drop occurs from the current price level, Bitcoin could fall below $30,000, in which case pension-usdt.eth's trade could turn into a profit of approximately $38 million.

Conversely, some analysts believe that Bitcoin's current structure differs from past bear markets. Analyst CRG explained that during the 2022 bear market, Bitcoin failed to close above the Ichimoku Cloud for even a single day, but it is currently trading stably above the daily cloud. Pierre Rochard, CEO of The Bitcoin Bond Company, also assessed that the current bear market is fundamentally detached from past cycles, stating that ETF inflows and continuous accumulation by Bitcoin treasury companies like Strategy are supporting its relative strength.

Participants in the prediction market Kalshi see a 50% chance of Bitcoin reaching $100,000 by 2026. Conversely, pension-usdt.eth's $81 million Bitcoin short position would be fully liquidated if Bitcoin reaches $100,810. Bitcoin has entered a volatile phase, oscillating between breaking the $82,430 resistance and the possibility of a $71,500 correction, which could even shake the profit and loss structure of large short positions.

*Disclaimer: This article is for investment reference only, and we are not responsible for investment losses based on it. The content should be interpreted for informational purposes only.*