Whale outlasts Hyperliquid BTC defenders in $449 million leverage tussle

Source Cryptopolitan

A Bitcoin whale with a $449M in a short position managed to take profits and unwind, before being liquidated by a social media task force. The whale then moved on to long Hyperliquid (HYPE). 

A whale used the extremely risky 40X leverage option on Hyperliquid to short Bitcoin (BTC), causing a backlash from the crypto community on X. However, the whale managed to take profits and close the position before being liquidated. The whale’s actions were considered a factor for the depressed BTC market over the weekend.

The whale still holds a leveraged short position on BTC, which at current prices is $2.7M in profit. The whole leveraged position is valued at over $449M. The liquidation price, after shifting the position, is at $86,088, with some leeway from the current valuations. 

The Hyperliquid whale saved the leveraged short position, despite concerted efforts from other traders to reach the liquidation price.
The Hyperliquid whale saved the leveraged short position, despite concerted efforts from other traders to reach the liquidation price. | Source: Hyperliquid

The appearance of a short BTC whale, dubbed Mr. Short, caused a minor rally as other traders attempted to open long positions and liquidate the whale. However, BTC lacked momentum and stalled just under the whale’s liquidation price. 

The whale currently holds a 3X cross-leverage position on Hyperliquid (HYPE) and a small 5X position for MELANIA. 

The BTC market recovered over $83,306.53, meaning the whale can continue holding the leveraged position and even take profits. 

The whale also holds 10 sale orders for the price level of $83,484, valued at over $8.88M BTC. Each order is for 108.47 BTC, awaiting favorable market conditions. The whale can thus benefit if other traders boost the price of BTC, which is close to his sell order range. 

The whale’s actions are also one of the factors that keep BTC on the low side, once again unable to regain the $85,000 level and stage a recovery. 

Mr. Short whale invites counter-trading action

Hyperliquid, with its outsized leverage options, has become an arena for risky trades. Whales have attempted high-leverage positions, as in the case of an Ethereum (ETH) bearish whale, which saddled one of the exchange’s pools with bad debt. 

The traders are capable of avoiding liquidation long enough while taking profit along the way. The only way to counter those positions is for traders with long positions to sway the price to the liquidation range. 

A trader from the Berachain community called for organized action, as soon as the whale’s position appeared late on Sunday. The so-called hunting of the whale required other large-scale traders to commit with significant positions. 

Over the course of a few hours, the whale shifted their liquidation price upward, for now defeating the efforts of counter-traders. The initial liquidation price, targeted by the counter-traders, was $85,290. The whale at one point had an unrealized loss of $1.3M, but they managed to turn it into to unrealized profits.

The team of traders managed to drive BTC above $84,690 briefly, but the whale avoided liquidation by depositing another $5M in USDC margin. After that, the whale even increased the short position to its current size of over $449M. 

Estimates suggest up to $500M may be needed to sway BTC to a price where the whale gets liquidated or is forced to increase margin deposits again. For now, Mr. Short remains the winner, though the unrealized profit remains uncertain.

The Hyperliquid whale remains anonymous

The whale remains anonymous, though the wallet was linked and funded by an ENS vanity address. Traders on social media speculated whether the whale is Eric Trump himself, with no supporting evidence.

Previously, shorting BTC was considered a risky move, in fear of being squeezed by other traders. This time around, BTC traders still operate on a fearful sentiment, and there was not enough organic volume to challenge the high-leverage position. 

The whale’s risky trade also set expectations the position would be liquidated soon, unleashing a weekly BTC rally. For now, the outcome of the trade remains uncertain, as the whale has fluctuated between expanding the position or trying to average out of it. 

The whale’s actions were time-sensitive and risky, with constant need to alter the position. At one point, the whale bought BTC at the lower price range of around $83,000. During peak trading conditions, the whale had $11.2M in unrealized profit.

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Disclaimer: For information purposes only. Past performance is not indicative of future results.
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