The price of Bitcoin unexpectedly broke through the 76,000 dollar mark, hitting a new low since April 2025.
In just 24 hours, the total market value of cryptocurrencies evaporated by over 110 billion dollars. According to Coinglass data, the total liquidation amount across the network reached an astonishing 2.566 billion dollars, with over 420,000 investors being ruthlessly 'targeted for liquidation'.
While the cryptocurrency world was bleeding, gold and silver, seen as traditional 'safe havens', also experienced an epic flash crash. The spot price of gold encountered the largest single-day drop in nearly 40 years on January 31, plummeting by over 10%, and the silver market was similarly in ruins.
When risk assets and safe-haven assets plunge simultaneously, it releases an extremely dangerous signal: the market is experiencing a comprehensive liquidity crisis.
In the landscape of the crypto world, 'Brother Maji' Jeffrey Huang is an unavoidable name. He is known for his aggressive, high-profile, and extremely leveraged trading style. To many retail investors, he symbolizes wealth and is seen as a whale that 'will never fall'. His trading movements are even treated as a market barometer.
He favors high leverage, often using 25x or even 40x leverage as a norm in his operations.
On the evening of January 31, as the market waterfall poured down, Brother Maji's position was completely liquidated.
The simultaneous plunge of gold and silver indicates that capital around the world is frantically seeking to convert into the most liquid asset—cash (mainly US dollars).
In the high-leverage contract market, a price drop triggers the forced liquidation of the first batch of long positions. These liquidations essentially 'sell' in the market passively, further driving down the price. Subsequently, lower prices trigger more people's liquidation lines, creating a new round of selling pressure... This cycle continues, forming a domino effect of successive liquidations.
During the plunge, on-chain analysts monitored the transfer of large amounts of Bitcoin from cold wallets to exchanges. This behavior is often interpreted as large holders or institutions selling off in preparation to supplement margins, avoid liquidation, or simply choose to 'surrender'.
What should we learn after the whale fall?
Brother Maji's 'whale fall' has at least taught us two painful lessons:
Reassessing the power of leverage: it can make you rich overnight but can also wipe you out in a second. In DeFi lending and contract trading, never use leverage beyond your capacity.
Awe of the market, abandon fantasies: do not blindly trust any 'big god' or 'whale'. Their capital size determines the risks they can withstand, which are unimaginable to us, but they are not gods either. When they cannot escape, retail investors should prioritize risk control over profit expectations.
