The $61M BTC Whale Liquidation: What It Tells Us About Leverage and Risk in This Sell-Off

A single leveraged Bitcoin position worth $61.5 million was forcibly closed on the HTX exchange on February 23, 2026. It was the largest individual liquidation recorded in 24 hours, according to CoinGlass data.

The forced closure happened as BTC slid from a weekend high near $68,600 on Saturday to roughly $64,300 by Monday morning, erasing the previous week's gains in a matter of hours. The Crypto Fear and Greed Index dropped to 5 out of 100. That reading has only occurred three other times since the index launched in 2018.

This was not a one-off event. It was the latest in a repeating pattern that has defined Bitcoin's price action since October 2025. Traders load leveraged longs into every bounce. The bounce fails. Liquidation cascades flush the leverage. The price resets lower. Then it starts again.

Here is what the data shows, why it matters, and what traders should be watching.

What Happened on February 23?

Bitcoin lost roughly 6% over the 48-hour period from Saturday's high to Monday's low. The $61.5 million BTC-USDT position on HTX was the headline, but the damage was far broader.

The 93% long ratio is the number that tells the real story. Almost every trader who got wiped was betting on a continuation of the weekend rally. The market was leaning overwhelmingly bullish going into Monday, and it got punished for it.

Hyperliquid's HYPE token appearing in the top five liquidation assets is notable. It rarely shows up alongside BTC, ETH, and SOL in liquidation rankings. Its presence signals that leveraged speculation had spread into mid-cap DeFi tokens, a sign that traders were reaching for risk on the bounce.

Who Was the Whale?

Nobody knows. The position size (over $61 million on a single exchange in a single trading pair) suggests a fund, proprietary desk, or extremely large individual trader rather than retail. CoinDesk reached out to HTX for comment but had not received a response as of publication.

The concentration of that much leverage on a single exchange in a single direction is itself a risk signal. When one position accounts for roughly 13% of all BTC futures liquidations in a 24-hour window, it suggests that either risk management failed or the trader was deliberately running a high-conviction, high-leverage bet that the weekend bounce would hold.

Another whale that got hit during Monday's sell-off was Jeffrey Huang (known as Machi Big Brother), the Taiwanese-American entrepreneur. He was partially liquidated on his ETH long position. His total crypto portfolio losses have now reached approximately $28.8 million. Despite those losses, on-chain data shows he continues building Ethereum longs, holding roughly 1,700 ETH worth about $3.2 million.

What Triggered the Sell-Off?

The immediate catalyst was the aftershock from Trump's 15% global tariff, imposed under Section 122 of the Trade Act of 1974 after the Supreme Court struck down his IEEPA tariffs on February 20. While BTC initially held steady over the weekend, the sell-off accelerated into Monday as traders processed the implications.

But the tariff headline was the match, not the fuel. The fuel was leverage. Open interest in Bitcoin futures had been climbing during the bounce from $60,001 (the February 6 low) back toward $68,600. According to BeInCrypto data, BTC futures open interest rose from $19.54 billion on February 19 to roughly $20.71 billion by the weekend, and funding rates had turned positive. That combination (rising open interest plus positive funding during a bounce) is textbook setup for a long squeeze.

When bids disappeared on Monday, those leveraged longs got flushed in sequence. The $61.5 million HTX whale was the biggest domino, but 137,421 other traders fell alongside it.

How Does This Fit the Broader Leverage Cycle?

This is not the first time overleveraged longs have been wiped in this sell-off. It is part of a repeating pattern that started with the October 2025 crash from BTC's all-time high of $126,000.

Each wave has been progressively smaller in total liquidation volume. But the pattern is the same. BTC bounces from a capitulation low. Traders reload leveraged longs during the bounce, interpreting the recovery as the start of a trend reversal. The bounce fails. Liquidation cascades flush the leverage. The price prints a lower high or retests the previous low.

Glassnode data confirms the damage is concentrated among short-term holders. The February 5 crash produced the largest single-day realized loss in Bitcoin's history at $3.2 billion, surpassing the Terra/Luna collapse of 2022. As of late February, the seven-day average of net realized losses among recent buyers was still running near $500 million per day.

BTC currently trades approximately 48% below its October all-time high and roughly 5.5% below its 2021 bull-market peak of $69,000. That 2021 peak, which once represented the ceiling for a full cycle, now functions as a contested support zone that keeps getting tested.

What Is the Derivatives Market Saying?

The derivatives picture has shifted meaningfully during this sell-off, and the signals are mixed.

Futures open interest contracted 28% over 30 days as of mid-February, according to CoinGlass data, falling from roughly $47 billion to $34 billion. In BTC terms, positioning held near 502,450 BTC, suggesting that leverage demand had not disappeared entirely but was being recalibrated lower.

Funding rates flipped negative across ETH and SOL perpetuals, and BTC funding compressed to near zero. This signals de-risking via position reduction rather than aggressive new short formation. VanEck's research noted that BTC's 7-day price decline ranked in the 99th percentile of historical outcomes, a statistical extreme that makes mean reversion increasingly probable.

Options market shows a split personality. On Deribit, the second-largest open position as of mid-February was a December 2026 call at the $120,000 strike covering 5,930 BTC. The third largest was a March 2026 call at $90,000 covering 5,665 BTC. But a massive put position of 7,409 BTC at the $40,000 strike expiring February 27 served as crash insurance. Traders are simultaneously hedging for catastrophic downside and positioning for a parabolic recovery.

The basis trade is unwinding. Investing.com analysis reported that the CME basis trade (buying spot BTC via ETFs while shorting CME futures) had collapsed from delivering 17% annual returns at peak to under 5% by early 2026. Hedge fund exposure to Bitcoin ETFs fell by one-third in BTC terms as funds unwound positions where the math no longer worked.

Spot Bitcoin ETFs have bled $4.5 billion in 2026. Five consecutive weeks of outflows, the longest streak since March 2025, have erased roughly $4 billion from the ETF complex. BlackRock's IBIT shed over $2.1 billion. Fidelity's FBTC lost $954 million. Total ETF holdings have dropped from 1.36 million BTC at peak to roughly 1.26 million BTC.

Polymarket currently prices a 75% chance that BTC will fall below $55,000 before the end of this cycle. Bets on drops below $50,000 and $45,000 sit at 61% and 47% respectively. At the same time, Polymarket assigns a 78% probability that BTC reaches $75,000 before 2027. The prediction market sees further downside as the near-term base case but continued conviction in eventual recovery.

What Does History Say About Fear-and-Greed Readings This Low?

The Crypto Fear and Greed Index has now hit 5 out of 100 twice in February 2026. The only other instances since the index launched in 2018 were August 2019 and June 2022.

In August 2019, BTC was trading near $10,000 after the mini-bubble from $3,200. It consolidated for months before eventually breaking out in late 2020.

In June 2022, BTC had just crashed from $69,000 to below $20,000 following the Terra/Luna collapse. That reading marked the approximate bottom of the cycle. BTC traded sideways for months before beginning its recovery in early 2023.

The sample size is small. But extreme fear readings this low have historically corresponded with zones where selling pressure was near exhaustion, even if prices did not immediately reverse upward. The question is whether February 2026 follows the June 2022 pattern (capitulation bottom followed by slow recovery) or the August 2019 pattern (extended sideways chop before the next major move).

Frequently Asked Questions

What is a crypto liquidation?

A liquidation happens when a trader using borrowed funds (leverage) cannot maintain the minimum collateral required by the exchange. The exchange automatically closes the position to prevent further losses. In the February 23 event, 93% of liquidated positions were longs, meaning traders betting on BTC price increases.

How big was the $61.5 million liquidation compared to other events?

It was the largest single position liquidated in a 24-hour window on February 23 but not the largest in Bitcoin history. The October 10, 2025 crash produced over $19 billion in total liquidations. The February 5, 2026 crash wiped over $1 billion in a single day. Monday's $468 million total is significant but smaller than previous waves in this sell-off cycle.

Is the selling over?

On-chain data from Glassnode shows realized losses have moderated from their February 5 peak ($3.2 billion in a single day) to roughly $500 million per day in late February. The intensity has cooled but remains elevated. A sustained recovery needs confirmation from three consecutive days of positive spot Bitcoin ETF inflows and a reclaim of the $68,000-$70,000 range.

What level would signal a bottom?

Analysts are watching $60,000 as the major support zone. BTC hit $60,001 on February 6 and bounced. A break below that level could trigger another cascade toward $55,000-$58,000 where denser supply clusters sit on-chain. On the upside, reclaiming $70,000 with volume would invalidate the current bearish structure.

Bottom Line

A single $61.5 million position on HTX got wiped on Monday. That is the headline. The context is that 137,422 other traders got wiped alongside it, 93% of them were long, and the Fear and Greed Index dropped to a reading that has only been matched three times in eight years.

The liquidation cycle since October 2025 follows a mechanical pattern. BTC drops. Leverage gets flushed. The price bounces. Traders reload longs. The bounce fails. Leverage gets flushed again. Each wave is smaller than the last, which suggests the excess is gradually being wrung out. But the pattern has not broken yet.

What has changed is the structural backdrop. The basis trade is unwinding. Spot ETFs are bleeding. Funding rates are compressed. Open interest has contracted 28% in a month. These are signs of a market that is de-risking, not one that is building positions for the next leg higher.

For traders using leverage in this environment, the lesson from the HTX whale is straightforward. The bounce from $60,001 to $68,600 looked like a trend reversal. It was a trap. Every leveraged long that loaded in during that move is now underwater or liquidated. Until BTC can hold above $70,000 with sustained volume and positive ETF inflows, the risk of another flush remains elevated.

BTC trades near $64,000 as of February 24, 2026. The Fear and Greed Index sits at 5. Polymarket gives 75% odds of $55,000 before this is over. The selling may be nearing exhaustion, but the data says the pain trade is still lower, not higher.

This article is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets carry extreme volatility and risk. Leveraged trading can result in losses exceeding your initial deposit. Always conduct your own research before making trading decisions.