Well-known crypto trader James Wynn is sounding the alarm on what he believes is an impending collapse of the digital asset market. As Bitcoin’s price continues to slide—dropping 1.69% to around $103,500—Wynn has added to his already massive $70 million short position, anticipating a deeper market correction fueled by geopolitical tension and economic instability.

Wynn Warns of War, Liquidity Crisis, and a “Great Reset”

Posting on the X platform (formerly Twitter), Wynn issued a stark warning about the combined effects of the escalating Iran-Israel conflict, tightening market liquidity, and declining retail participation in crypto.

“If the USA gets involved, that’s basically a declaration of a world war. Other nations will take sides. Tensions will rise. Markets will nuke,” Wynn wrote. He added, “Then we’ll get rate cuts, money printing, and the great reset. Crypto will ultimately win, but first it goes lower before it goes higher.”

This sentiment echoes growing fears among investors that geopolitical instability in the Middle East could trigger panic in global financial markets, including crypto.

Bitcoin and Altcoins Face Heavy Selling Pressure

Wynn’s bearish call coincides with a sharp downturn in the crypto market. Over the last 24 hours, more than $481 million in leveraged positions were wiped out across exchanges, according to Coinglass. The largest share of this came from long positions, as bulls were caught off guard by the sharp decline in BTC and major altcoins.

Bitcoin dipped to $103,500, while Ethereum (ETH) fell by over 4%, continuing its recent downward trajectory. Other major cryptocurrencies, including Solana, XRP, and Cardano, also recorded sizable losses, reflecting widespread market unease.

Doubling Down on the Short

Known for taking high-conviction positions, Wynn said in a post, “I think I’m going to add more to my short. Nothing wrong with doubling down on your convictions. That’s what got me to where I am today.”

Wynn’s stance represents a minority view in a market still broadly optimistic about Bitcoin’s long-term potential. However, his track record and willingness to publicly share bold trades have made his predictions hard to ignore.

On-chain data shows that bulls and bears are locked in a tight battle, with many leveraged traders liquidated on both sides of the market. The decline in open interest and spot buying reflects growing hesitation among retail and institutional investors.

Geopolitical Risk Meets Monetary Uncertainty

The crypto market’s fragility is being tested not just by regional conflict, but also by a divided outlook on U.S. monetary policy. Federal Reserve Governor Christopher Waller recently hinted that rate cuts could arrive as soon as next month. But just days earlier, Fed Chair Jerome Powell indicated no plans to lower rates in the immediate future during the latest FOMC meeting.

Wynn believes that without immediate monetary easing, the combination of tightening liquidity and geopolitical instability could send markets tumbling. “Powell refusing to fling is hurting risk-on markets. Retail has exited. Liquidity is vanishing,” he said in his post.

Market Liquidations Accelerate

The recent price drop triggered hundreds of millions in liquidations. In the last 24 hours alone, nearly half a billion dollars in long positions were erased, suggesting traders were caught off guard by the intensity of the move.

This kind of volatility is not new to crypto, but Wynn argues that the current macro environment makes it far more dangerous. He believes the market is approaching a reset phase—one that will test the resilience of crypto investors.

A Contrarian View or a Wake-Up Call?

Despite his dire short-term outlook, Wynn remains a long-term crypto bull. “Crypto will win,” he says, but insists that the path forward involves more pain before any meaningful gains. His theory: once markets “nuke,” central banks will be forced to respond with aggressive monetary stimulus, creating the ideal setup for a future crypto bull market.

While many disagree with Wynn’s grim forecast, the sheer scale of his short position has drawn attention across the trading community. Some view his bet as a hedge against broader market risk, while others worry that it reflects deeper cracks in crypto’s current structure.

Conclusion

James Wynn’s prediction of a crypto market crash is being closely watched. Whether his call proves right or wrong, it highlights the growing role that macroeconomic and geopolitical factors are playing in shaping digital asset markets.

As tensions mount and the crypto space reels from heavy losses, investors are left to weigh the risks of further downside against the possibility of long-term recovery. For now, Wynn is betting big that the worst is yet to come.