Bitcoin bear down $4.56M opens $23M 40x short as rally persists

A bitcoin trader lost $4.56 million on 14 straight shorts in five days, then opened a 40x short on 300 BTC worth $23.13 million.

Lookonchain, the on-chain analytics firm tracking the wallet identified as bowen1476, said the trader's 15th short position was opened at an entry near $77,100 as bitcoin traded around $77,500.

The position comes after bitcoin's 22 percent weekly rally, triggered in part by the U.S. Treasury doubling its long-dated bond buyback operations from $2 billion to $4 billion per operation. The move liquidated more than 172,000 short positions and wiped out roughly $3 billion in bearish bets within a single 24-hour window, according to Lookonchain data. President Trump added momentum by urging Congress to pass the Clarity Act, which would establish federal rules for digital assets.

The new 40x position requires bitcoin to fall below its $77,100 entry to turn a profit. The wallet has not closed a winning short since May, when a 700 BTC position worth $56.68 million was closed at a $1.94 million loss, erasing $1.71 million in prior gains from 11 winning shorts.

Each new position has been opened at progressively higher prices as bitcoin has climbed. The wallet's April activity included a 33x leveraged short on 200 BTC worth $14.15 million at an average entry of $70,745, its fifth short position that month alone. On Aug. 19, a separate short was liquidated as part of a $270 million wipeout of short positions.

Bernstein strategist Gautam Chhugani attributed bitcoin's breakout from a six-week trading range between $60,000 and $65,000 to the Treasury's expanded buyback program. Bitcoin has since touched a seven-day high of $79,500, within reach of the wallet's newest short entry.

Technical indicators suggest the rally may face resistance. Bitcoin traded at $76,928 as of Aug. 24, testing the upper Bollinger Band at $78,662.67, with the relative strength index at 64.89, according to blockchain.news data. A retracement toward the EMA50 support at $72,090.30 would be needed for the trader's 15th short to succeed.

The trader has shorted both BTC and ETH throughout the period, with all 14 prior positions closing at a loss. Whether the streak breaks depends on whether bitcoin's rally has further to run, and whether the $23.13 million position triggers a liquidation cascade or a short squeeze that increases volatility in either direction.

This article is for informational purposes only and does not constitute investment advice.