Market analysts suggest that a whale might have established a massive $520 million short position on Bitcoin with 40x leverage on Hyperliquid, potentially setting a trap to trigger a significant long.
On March 16, a Bitcoin (BTC) whale executed a colossal $520 million short position on Hyperliquid (HYPE) at 40x leverage, marking it as one of the largest trades recorded on the decentralized exchange.
The liquidation price for this trade stands at $85,561, meaning the position would be liquidated if Bitcoin were to increase by just 1.75% from the entry point of $83,898. This immediately captured the attention of traders eager to instigate a liquidation.
A pseudonymous trader known as Cbb0fe took to X to galvanize a collective effort to push Bitcoin’s price upward, aiming to trigger the liquidation. Within moments on that same day, the price surged by 2.5%, almost reaching the whale’s liquidation threshold before the whale added more funds to elevate their liquidation price.
In a report from March 17 by 10x Research, analyst Markus Thielen pointed out that this incident is part of an emerging trend that involves the democratization of stop-loss hunting. This trend sees independent traders, not just institutions, collaborating to influence market movements, driven by the visibility of leverage trading on DEXs.
However, some analysts are speculating that the whale’s enormous position might be a deliberate maneuver rather than an oversight in their short strategy. Cryptocurrency analyst Josh Man suggested that the whale could be intentionally positioning themselves for liquidation in an effort to encourage a price rally, a strategy referred to as “self-liquidation.”
If the whale maintains a significantly larger long position elsewhere, the liquidation of their own short could propel Bitcoin higher, greatly benefiting their long position.
This isn’t the first time Hyperliquid has experienced high-stakes trading. Just the previous week, a trader had taken a $285 million leveraged bet on Ethereum (ETH) that resulted in a $4 million loss for the platform. As a precaution, Hyperliquid subsequently lowered leverage limits for both Bitcoin and Ethereum.
Currently, the crypto community is closely monitoring Bitcoin’s price movements. If the whale’s short position is liquidated, it could further prop up the price. Either way, independent traders and the whale are currently involved in a high-stakes game in this trade.