In the BTC downtrend, whales are losing $25,000, but they are still leveraged long on LIT with an unrealized loss of $170,000.

A certain whale made an interesting move during the BTC decline: closing a losing BTC long position and immediately betting on LIT with leverage. What does this reflect? A strong bullish outlook on the future market, or a typical trait of high-risk preference traders?

Closing Decisions During BTC Decline

According to the latest news, at 14:45 on January 21, 2026 (Beijing time), a whale closed a position of 321.91 BTC longs, realizing a loss of $25,000. This transaction occurred amid BTC’s recent continuous decline: down 1.54% in the past 24 hours, 5.73% over the past 7 days, with the current price around $89,475.99.

In such a declining environment, the whale’s loss-making close is not surprising. But more noteworthy is that this address did not choose to wait and see, but immediately reallocated its position.

Trading Logic Behind the Reallocation

Conversion from BTC to LIT

After closing the BTC position, this whale immediately went long 638,200 LIT with 3x leverage, with an entry price of $1.89. This operation shows several characteristics:

• The leverage multiple shifted to 3x from a previous level, indicating adjusted risk management
• Switching to LIT, a smaller coin, suggests the address is actively seeking new opportunities
• The current LIT position is already floating loss of $172,600, far exceeding the loss from closing BTC

Trading Style Characteristics

From this address’s actions, it’s a typical high-risk preference trader:

• Continually using leverage for trading
• Not cutting losses when in loss, but reallocating to other coins
• Willing to bear significant unrealized losses
• High trading frequency with short holding periods

Market Environment Pressure

According to related information, recent whale losses are not isolated cases. Over the past few days, there have been multiple whale losses in the market:

• A whale liquidated assets like ASTER, losing $4.21 million
• The “255 BTC Sold” whale closed longs and reversed to short, ultimately losing $16.14 million
• A whale bottomed out GAS and is floating nearly $17,000 in loss

This reflects that the current market environment is unfavorable for longs, and the bullish camp is under pressure.

Summary

Behind this transaction is a high-risk trader exhibiting a typical behavior in a declining market: not cutting losses but reallocating and increasing leverage on other assets. As of now, this decision has not been effective; the floating loss on the LIT position is nearly 7 times the loss from the BTC close. This reminds us that in unfavorable market conditions, aggressive reallocation strategies often amplify risk rather than mitigate it.