An internal whale used $16.28 million to place short orders for Bitcoin and Ethereum over half a month, but the entire position was liquidated with almost total loss.
This investor just withdrew $10 million USDC from Maker and transferred it to Hyperliquid to continue short-term betting, while the market currently has $232 million in open short orders.
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Whales manipulated short orders worth $16.28 million on BTC and ETH with high risk.
As a result, the entire short position was liquidated, causing a loss of $16.27 million.
Currently, there are $232 million in active short orders in the market, with BTC orders accounting for $150 million.
What is the short order of the internal whale and how did the process unfold?
According to on-chain analysis data by expert Yu Jin, this whale used $16.28 million to open multiple short positions for Bitcoin and Ethereum over about half a month.
All of these positions were liquidated on the most recent day with a total loss equivalent to $16.27 million. This incident highlights the significant risk when whales bet against at high leverage.
"The liquidation of such a large capital amount reflects strong volatility in the cryptocurrency market and also warns of the risks of leverage. This also shows that whales cannot always control market trends."
Yu Jin, On-chain Analyst, 12/7/2024
What are the current short positions in the Bitcoin and Ethereum markets?
The latest statistics record a total of $232 million in short orders currently open in the cryptocurrency market, with Bitcoin accounting for the majority at $150 million.
In detail, the 40x short position on 1,273 Bitcoin with an opening price of $117,828 and a liquidation point of $122,789. Ethereum has 27,700 ETH shorted at 25x with an opening price of $2,966 and a liquidation point of $3,196.
The significance of high leverage short orders in the cryptocurrency market
Short orders with high leverage like 25x or 40x are indicative of a high-risk strategy to take advantage of strong price fluctuations. However, the case of the whale also shows how easily liquidation can occur if the market goes against the prediction.
Professional investors and traders need to carefully assess price volatility, performance, and risks to avoid significant losses when using leverage in the fast-moving cryptocurrency market.
Where did the whale just withdraw capital and continue short trading?
This investor withdrew $10 million USDC from the Maker lending platform to transfer to Hyperliquid, a derivatives exchange, to open further short positions.
This indicates a strategy using cryptocurrency assets as collateral to borrow capital, continuing to bet on the market to take advantage of short-term fluctuations.
"Using lending platforms to obtain capital for opening short positions reflects the trend of increasing financial leverage in the modern cryptocurrency market."
Mr. Ly Minh, CEO of a cryptocurrency investment fund, 7/2024
What lessons should be learned from this high-capital liquidation event?
The complete liquidation of the whale's position highlights the importance of risk management and limiting excessive leverage in cryptocurrency trading.
Professional investors always emphasize technical analysis, position management, and preparing reasonable stop-loss plans to avoid losing all capital as in the case above.
Risk factor comparison table for high leverage short orders
Short Factor 40x BTC Short 25x ETH Opening Price $117,828 $2,966 Liquidation Price $122,789 $3,196 Position Value $150 million $82.42 million Leverage Used 40 times 25 times Number of Coins 1,273 BTC 27,700 ETH
Frequently Asked Questions
What is an internal whale in the cryptocurrency market?
Internal whales are large investors with deep knowledge who use significant capital to manipulate or take advantage of market fluctuations. They often have a strong influence on prices.
Why does liquidating short positions cause significant losses?
Due to trading with high leverage, if the price moves against the prediction by a few %, the position can be liquidated, causing the investor to lose the entire margin.
How to reduce risks when using cryptocurrency trading leverage?
Prioritize tight capital management, set reasonable stop-loss orders, monitor market fluctuations, and avoid taking excessive risks in a single position.
What is the role of lending platforms like Maker in derivatives trading?
These platforms provide collateralized loans in cryptocurrency, helping investors open larger positions with financial leverage in derivatives trading.
How to track whale positions in the cryptocurrency market?
It can be monitored through on-chain data analysis and reports from reputable analysts or tools that track large wallets on the Blockchain.
Source: https://tintucbitcoin.com/whales-usdc-open-short-order-large/
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