Insider whales continue to increase their short position with a value of 300 million USD.
According to observations from on-chain expert Yu Jin, this whale uses high leverage, continuously extending their short position across four major tokens, yielding a profit of 7 million USD. This is a high-risk strategy that can easily lead to significant losses if the market direction is mispredicted.
MAIN CONTENT
Insider whales maintain a short position worth 300 million USD.
Continuously applying the roll position strategy with high leverage.
Currently shorting BTC, ETH, XRP, and SOL with an unrealized profit of 7 million USD.
Who are insider whales and why is their short position noteworthy?
According to analysis by on-chain expert Yu Jin on August 3, 2024, insider whales are large investors with deep knowledge of the market, often having a significant influence due to strong financial resources. The 300 million USD short position indicates a high level of risk and potential market impact.
This whale employs the roll position strategy, meaning reinvesting and maintaining a continuous short position. This strategy is often not for the faint-hearted, especially when using extremely high leverage, as a wrong market prediction can result in heavy losses, causing price volatility in the target tokens.
How does the roll position strategy work in this case?
Roll position is a technique for recreating positions upon expiration, aimed at keeping the investment continuously active. This insider whale applies it by continuously extending their short position on BTC, ETH, XRP, and SOL, maintaining unrealized profits.
Using leverage at extremely high levels helps optimize short-term profits but increases the risk of sudden losses. The current position has an unrealized profit of 7 million USD, reflecting accuracy in short-term predictions but can lose everything if the market moves in the opposite direction.
The roll position strategy with high leverage is a double-edged sword: if correct, the profits are very large; if wrong, the losses are enormous.
Yu Jin, on-chain analyst, August 3, 2024
Why is shorting four tokens BTC, ETH, XRP, and SOL at the same time risky?
Shorting BTC, ETH, XRP, and SOL simultaneously shows that whales are betting on a downward trend across multiple leading tokens. Each token has its own characteristics and volatility while being influenced by various market factors and news.
This position allocation helps diversify but also raises overall risk as simultaneous declines are rarely long-lasting. If one of the tokens increases in price, the whale will suffer significant losses on assets, even leveraged losses making the impact heavier.
Real-world examples of leverage impact and risks from cryptocurrency whales
In recent years, whales using leverage have created pump and dump scenarios in the market. For instance, the 2021 bull market witnessed whales leveraging to push ETH and BTC prices to all-time highs, but simultaneously causing turbulence when the market reversed.
The roll position strategy further emphasizes that expertise and risk control must be extremely tight to maintain profitable positions, especially when the cryptocurrency market capitalization can fluctuate instantly by tens of billions of USD.
Frequently Asked Questions
What are insider whales?
Insider whales are large investors holding significant financial positions in the cryptocurrency market, with information and strategies that go deeper than most investors.
What risks does roll position entail?
Using high leverage in roll position can generate substantial profits, but if the direction is wrong, it can lead to severe losses due to debt costs and price volatility.
Why is shorting BTC, ETH, XRP, and SOL simultaneously risky?
Assets have different volatility and influencing factors; simultaneously shorting many large tokens can easily become unbalanced and incur losses if one token goes against the trend.
What is unrealized profit?
Unrealized profit is the profit that has not yet been realized, changing according to market price and can be lost if the position reverses.
How does leverage in cryptocurrency trading affect outcomes?
Leverage increases the potential for quick profits but also significantly raises the risk of losses compared to the initial investment.
Source: https://tintucbitcoin.com/whale-noi-bo-ban-khong-300-trieu-usd/
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