Blockchain Detective Tracks Short Loss Positions: Lessons from Trader 136.15 BTC

The ability to become an on-chain detective to identify suspicious trading activity is becoming increasingly important. The latest BlockBeats report reveals how blockchain analysis can track high-risk trading positions before significant losses occur.

On-Chain Analysis: Short Position of 136.15 BTC Falls into 40x Leverage Trap

On January 31, the BlockBeats blockchain data detective team discovered a trader with the account ‘Bai Sheng Zhan Shen’ who opened a short position of 136.15 BTC with 40x leverage. This position was opened at an average price of $83,469.3 per BTC, reflecting a massive bet against the decline of the largest cryptocurrency.

Short selling with such high leverage carries exponential risk. When the market moves against the trader’s expectations, losses are not only on the principal position but are amplified by the leverage effect. In this case, the trader experienced a floating loss of $74,000, indicating the current position is well below the breakeven point.

Trading History: How On-Chain Detectives Track Profit and Loss Patterns

Through blockchain forensic analysis, on-chain detectives can trace the entire transaction history of this account. Data shows that the trader’s previous address recorded total losses of $5,195.36 across 5 transactions. However, on the other hand, all other trading positions were successfully closed with profits, accumulating a total account profit of $474,000.

This analysis reveals an important pattern: although the trader’s track record has been historically profitable, the decision to open an extreme leverage short position at this time reflects a shift toward riskier strategies. When BTC is trading far below the opening price, the trader is caught in a losing position.

Lesson for Investors: Understanding Leverage Risks and Position Management

This case is a perfect illustration of how to become a smart detective in the crypto market. Although the trader has a profitable track record, using 40x leverage shows that there are no guarantees in trading, regardless of past success. The floating loss of $74,000 on this position emphasizes the importance of strict risk management and avoiding excessive leverage.

Investors who want to learn from such cases should understand that on-chain detectives not only uncover suspicious activity but also provide insights into market dynamics and the behavior of experienced traders. The ability to analyze on-chain footprints helps investors make more informed decisions about their market exposure.