In the realm of digital currency derivatives trading, a trader known as James Wynn recently faced total liquidation three times in one week after using 40x leverage to short Bitcoin, becoming a cautionary tale in cryptocurrency trading.
According to blockchain analytics firm Lookonchain, tracked and reported by PANews on March 26, 2026, James Wynn established short positions on Bitcoin three times within a week on the decentralized perpetual contract exchange Hyperliquid, all with 40x leverage. However, each time, a slight increase in Bitcoin's price was enough to trigger a complete forced liquidation of his positions.
Three Shorts, Three Liquidations in Seven Days
Wynn's three Bitcoin short trades on Hyperliquid all utilized 40x leverage. Hyperliquid is an on-chain perpetual futures platform where traders' activities are publicly visible. Each time, even a minor uptick in Bitcoin's price was sufficient to wipe out his entire margin.
After the first liquidation, Wynn reportedly replenished his account with approximately $2,600 and established another short position. Blockchain intelligence platform Arkham Intelligence publicly noted, “James Wynn is back and shorting Bitcoin.”
Despite experiencing three liquidations in one week, detailed loss amounts for the first two incidents have not been disclosed. Only the event on March 24 has a clear recorded loss figure.
Why 40x Leverage Shorting Bitcoin Leaves Little Room for Error
With 40x leverage, the total margin required by traders can be completely evaporated with a 2.5% adverse price movement. The calculation is straightforward: dividing 1 by the leverage ratio (1/40 = 0.025) yields the liquidation threshold percentage based on the entry price.
Bitcoin's average daily volatility typically ranges from 2% to 4%, especially during clear trends or market fluctuations. A 2.5% intraday price movement is common. For short sellers using 40x leverage, even a brief upward wick on the candlestick chart can trigger the forced liquidation mechanism, resulting in liquidation before any price reversal occurs.
Shorting an asset that has historically been in a long-term uptrend with leverage further amplifies the statistical disadvantage of the trade. High-leverage counter-trend trading requires traders to have near-perfect timing on entry and exit, allowing for almost no temporary adverse price movements.
High-Profile Whale on Hyperliquid: 194 Liquidations and $98.5 Million in Losses
James Wynn is not an anonymous market participant. He is one of the prominent traders on the Hyperliquid leaderboard, with his position sizes, leverage levels, and profit and loss data visible to all users.
His trading history includes significant leveraged long and short positions on Bitcoin and other assets. Reports indicate that he previously established a 40x leveraged long position and made over $40,000 in profit, but this data comes from secondary reports and has not been independently verified in the on-chain records of this article.
However, his loss records are quite detailed. Throughout his trading career, Wynn has been forcibly liquidated a total of 194 times. Since May 2025, his total losses have approached $98.5 million, with a single weekend alone causing a massive drawdown of $80 million.