Large investors hit by flash crash, Wallet 1011 records over $22 million in unrealized losses

On December 13th, a flash crash occurred in the cryptocurrency market, causing significant unrealized losses for multiple large investors. According to PANews, analysis by on-chain analyst Mr. Ai Yi revealed that this rapid decline event within a short period had a severe impact on their portfolios.

A flash crash is a phenomenon where prices plummet sharply within an extremely short time. It is triggered by decreased market liquidity and large sell orders, which activate automated liquidation programs in a chain reaction, resulting in price fluctuations that are usually unimaginable. The impact of this event on the Ethereum (ETH) market was particularly serious for investors holding large positions.

1011 Insider Whale’s Large Unrealized Losses

After the flash crash, a large investor known as “1011 Insider Whale,” who was shorting ETH, suffered an unrealized loss of $22.43 million within 24 hours. Subsequently, the market recovered, and the unrealized loss related to their $670 million long position has been reduced to $12.97 million.

In terms of position composition, ETH accounts for over 80%, indicating a high concentration in a single currency. The wallet’s holdings amount to approximately $550 million, with collateral of $129 million, making it extremely large. Considering these margins, the likelihood of forced liquidation (margin call) is deemed very low.

Maji Brother’s Position Management and Liquidation Risk

Meanwhile, trader Mr. Huang Licheng (also known as Maji Brother) recorded an unrealized loss of $1.002 million within the same 24 hours. During the early morning sharp decline, he was forcibly liquidated with a loss of $720,000, but then deposited an additional $200,000 in margin to restore his position.

Currently, his ETH holdings amount to 3,875 units (approximately $12.06 million), with an unrealized loss of $300,000. Notably, the liquidation price is set at $3,053.73, and the distance to the current mark price of around $3,050 is only about $4. This extremely narrow margin indicates that if another flash crash or price fluctuation occurs, the risk of losing the position increases significantly.

Market Vulnerability Revealed by the Flash Crash

This event has once again highlighted the significant impact that large leveraged positions can have on the market. Excessive concentration in a single currency and holding positions with little margin before the liquidation price make the market highly vulnerable to unexpected price swings like flash crashes. Such market risks will continue to provide important insights for investors’ risk management strategies.