586,053 Traders Got Liquidated in 24 Hours. One Trader Took 80% Profit. Here’s the Difference.

One Trader Took 80% Profit. Here’s the Difference.

What @MMCrypto’s $27M leveraged exit, @CryptoMichNL’s bottoming thesis, and the lowest Fear & Greed reading in history tell us about surviving crypto’s worst crash since FTX.

There’s a conversation on X right now that perfectly captures both sides of this market.

On one side, @MMCrypto is posting receipts — a $27 million BTC/USD long position at 17x leverage, entry at $72,126, profits taken at $118,000. Total profit taken: 80%. He wrote: “EVERYONE LAUGHED AT ME!” And honestly? He earned that. The man closed the majority of his position months before Bitcoin lost half its value.

On the other side, 586,053 traders were liquidated in a single 24-hour period on February 5. $2.65 billion gone. $2.2 billion of that from long positions. The largest single-day liquidation event since FTX collapsed. According to CoinGlass, this was the fourth-largest 90-day liquidation flush in crypto history.

Same market. Same leverage tools. Radically different outcomes. The difference wasn’t intelligence — it was risk management. And that's what I want to break down today: after 5 years in Web3, I’ve watched this exact pattern repeat in every cycle.

What Actually Happened on February 5

Let’s establish the timeline. Bitcoin had already been sliding — from $126,000 ATH in October 2025 to the low $70Ks by early February. But February 5 was different.

BTC dropped 17% in 24 hours, flash-crashing to $60,000 at 7:20 PM ET before partially recovering to $64,100. VanEck’s analysis measured it as a -6.05σ move on the rate-of-change Z-score — one of the fastest single-day crashes in crypto history. For non-quants: a move this extreme statistically “shouldn’t happen” more than once in millions of trading days.

The cascade was mechanical, not emotional. Kronos Research CIO Vincent Liu described it as “a perfect storm: forced liquidations from over-leveraged longs, ETF/institutional outflows, and a broader risk-off macro backdrop.” BTC Markets analyst Rachael Lucas added: “Traders are no longer trying to catch falling knives. They’re prioritizing capital preservation.”

Bitcoin’s market depth — the amount of liquidity available on order books — had fallen to just 30% of its October peak. The Kobeissi Letter noted that the total crypto market cap dropped $2.2 trillion from October levels, and BTC had erased ALL of its post-election rally.

The CMC Fear & Greed Index hit 5 — the lowest reading ever recorded. Lower than Terra’s collapse. Lower than FTX. @Cointelegraph confirmed it today: “the lowest level on record.”

The Two Types of Leveraged Traders

Here’s what separates @MMCrypto from the 586,053:

@MMCrypto’s position: 17x leverage, $27.3M position size, entry at $72,126, mark price at $117,784 when he took profits. Estimated liquidation price: $68,707. He took 80% profit across multiple exits — $118K, $114K, $104K, and $98K. Realized P&L: ~$13M. Unrealized at peak: $17.2M.

The critical detail: his liquidation price was $68,707. Bitcoin is currently trading around $67K. If he hadn’t taken profits, that entire position would be underwater or liquidated right now.

The 586,053 who got liquidated: Most were long positions (83% of the $2.65B). Many were using leverage without defined exit points, without calculating their liquidation prices relative to realistic drawdown scenarios, and without the discipline to take profits when the trade was working.

@CryptoMichNL shared what he calls “the best chart in Crypto & Bitcoin” — a BTC vs Business Cycle vs Liquidity Cycle overlay showing that markets peaked in December 2024, are bottoming this month, and could see a strong bull market ahead. The thesis has data behind it. But even if the macro thesis is right, the timing is what kills leveraged traders. Being right about direction but wrong about timing when you’re at 17x leverage is the same as being wrong about everything.

The Mechanics of Liquidation Cascades

Here’s why February 5 escalated so fast, explained from an engineering perspective.

When BTC dropped below key support levels ($70K, then $65K), it triggered automated liquidation of long positions on exchanges. Those forced sales added selling pressure, which pushed the price lower, triggering more liquidations. This is a positive feedback loop — and it’s entirely mechanical.

VanEck’s research noted that $3–4 billion in total liquidations occurred over the past week, with $2–2.5 billion concentrated in Bitcoin futures alone. But critically, they also noted that “leverage has been reduced alongside price rather than driving a disorderly unwind” — meaning the market hasn’t experienced a classic capitulation event yet.

Peter Brandt (@PeterLBrandt) suggested Bitcoin could find support near $42,000 based on his “Bitcoin Power Law” model, while @PeterSchiff went full Schiff and called for $10K (which @LarkDavis correctly pointed out is absurd — at $10K the institutional buy wall from ETFs, Strategy’s 714K+ BTC holdings, and sovereign funds would be massive).

The point isn’t who’s right about the bottom. The point is that the range of analyst predictions — from $10K to $150K (Bernstein’s year-end target) — tells you how much uncertainty exists. And uncertainty at high leverage is how accounts go to zero.

What 9 Years in Tech Taught Me About Risk

I’ve been building software for over 9 years and working in Web3/crypto for 5. The engineering mindset applies directly to trading:

1. Never deploy without a rollback plan. In trading, that’s your stop-loss or your predefined exit strategy. @MMCrypto had exit points at $118K, $114K, $104K, and $98K. That’s a rollback plan. Most of the 586,053 didn’t have one.

2. Stress-test for edge cases. VanEck measured Feb 5 as a -6.05σ event. Your position sizing should survive events that “shouldn’t happen.” If a 17% single-day drop liquidates you, your position is too large.

3. Uptime matters more than features. During the Feb 5 crash, multiple exchanges experienced withdrawal freezes and API throttling. When 586,053 traders are being liquidated simultaneously, the difference between an exchange that stays operational and one that returns 504 errors is literally the difference between managing your risk and watching helplessly.

This last point is where infrastructure becomes personal. I trade derivatives on Bitunix — they maintained full operations throughout February 5, including withdrawals and sub-millisecond execution, while other platforms were degrading. Ranked in the top 10 on CoinGlass for open interest, $5B+ daily volume, 200x leverage available, Proof of Reserves verified on-chain, and backed by a 30M USDC Care Fund.

If you’re trading leveraged positions during extreme volatility, your exchange’s infrastructure IS your risk management. Code BITUNIXBONUS gets you up to 7,700 USDT in bonuses, 77.7% fee discount, and instant VIP 2 for 30 days

What @BenjaminCowen Gets Right

@intocryptoverse posted this week: “The death of speculative excess isn’t bearish long term. It’s how markets mature. Capital eventually flows toward durability.”

He’s right — but there’s a nuance most people miss. The speculative excess that’s “dying” isn’t crypto itself. It’s reckless leverage. The traders who survived this crash will be the ones who build the next cycle. Those who were liquidated will either leave or come back with the same habits and be liquidated again.

Spot volumes on major exchanges are down 30% since late 2025, per Kaiko. Retail participation is fading. But the infrastructure is expanding — Fidelity FIDD, Tether MiningOS, European banks under MiCA, @elikiamusk’s X Money hitting external beta in 1–2 months. The market is contracting in price and expanding in plumbing. That divergence resolves eventually. It always does.

The Uncomfortable Math

Crypto bear markets average 13–15 months. This one started around January 2025. We’re 12–13 months in.

Bernstein maintains a $150,000 BTC target by year-end 2026. Zacks says $40K is possible. Polymarket gives 40% odds of sub-$60K in February. Ray Youssef (CEO of NoOnes) says sideways until summer 2026 with 20–30% relief rallies that may be bull traps.

Nobody knows. But here’s what you can control: your leverage, your exit strategy, your exchange infrastructure, and your fee structure. Those four things determine whether you end up posting receipts like @MMCrypto or become one of the 586,053.

The crash will end. The question is whether you’ll still be in the market when it does.

Disclaimer: This is not financial advice. Trading leveraged digital assets involves significant risk of total loss. Do your own research.

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586,053 Traders Got Liquidated in 24 Hours. One Trader Took 80% Profit. Here’s the Difference. was originally published in Coinmonks on Medium, where people are continuing the conversation by highlighting and responding to this story.