A significant liquidation event involving Ethereum has sent shockwaves through the cryptocurrency market, resulting in a staggering $2.5 billion wipeout. The turmoil was ignited by a whale”s exit from a $250 million leveraged position on the decentralized exchange Hyperliquid, causing Bitcoin to tumble below $78,000 and Ether to drop to approximately $2,400 amidst ongoing macroeconomic stresses.
In the past 24 hours, total liquidations surpassed $2.5 billion, with Ethereum accounting for $1.14 billion and Bitcoin for $765 million. The infamous whale, linked to former BitForex CEO Garrett Jin, closed out an entire leveraged ETH position, realizing a $250 million loss, which left the account with a mere $53.
Further complicating the situation, BitMine Immersion Technologies, associated with investor Tom Lee, reported over $6 billion in unrealized losses from its holdings of 4.24 million ETH. This significant decline in value highlights the risks associated with large-scale treasury strategies during bearish market conditions.
On January 31, 2026, Bitcoin fell to a nine-month low, reaching $77,195, marking a 7.79% drop in a single day and a 13% loss over the week. This move pushed BTC beneath its true market mean of $80,700, a level that has not been breached since October 2023. Strategy, the largest corporate holder of Bitcoin, saw its holdings sink below its $76,037 cost basis.
The sell-off was exacerbated by macroeconomic factors, including a partial U.S. government shutdown and the nomination of Kevin Warsh as Fed chair, indicating a potentially hawkish interest-rate approach. These conditions resulted in $817 million in net outflows from U.S. Bitcoin exchange-traded funds (ETFs), with BlackRock”s IBIT experiencing $317 million in redemptions.
As noted by market commentator The Kobeissi Letter, “In a market where liquidity has been choppy at best, sustained levels of extreme leverage are resulting in air pockets in price.” The recent liquidation event echoes the $19 billion liquidation cascade that followed former President Trump”s tariff announcement in October 2025.
Analysts suggest that any rebound in the market will depend on improved liquidity levels and increased retail inflows. However, with leverage ratios reset and market sentiment remaining cautious, a short-term recovery appears uncertain.
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Please note: This article is for informational purposes only and does not constitute financial advice. Readers should perform their own research before making any investment decisions.
