A cryptocurrency investor turned $125,000 in principal into millions in profit by trading Ethereum on a decentralized exchange, even as whales began locking in profits after a recent rebound.
Before the market correction, this savvy trader increased the investment to a peak of over $43 million in just four months. Despite the market's pullback, he liquidated all positions on Monday, realizing a net profit of $6.86 million, with his initial investment multiplying by 55 times, according to data from blockchain data platform Lookonchain.
The trader deposited an initial $125,000 at the Hyperliquid exchange, cleverly reinvesting every dollar earned into a long-term ETH position, expanding to a massive $303 million position, Lookonchain noted in a post on platform X on Sunday.
The trading patterns of large market players are often monitored to gauge the short-term movements of cryptocurrencies, as these investors hold capital that can influence the market.
Whale movements and ETF flows
Last weekend, the U.S. spot Ethereum ETF saw an outflow of $59 million on Friday, ending eight consecutive days of net inflows, data from Farside Investors indicates.
With the outflow of ETF funds on Friday, more Ethereum whales began to lock in profits during the remaining August holiday period, anticipating a potential correction.
On Monday, a wallet named '0x806' sold over $9.7 million worth of Ethereum, making it the second-largest single sale in the past 24 hours, according to Nansen data.
Another top Ethereum trader's '0x34f' wallet also sold $1.29 million worth of Ethereum, with many other whales also offloading significant amounts of the world's second-largest cryptocurrency.
"The strong performance of Ethereum has attracted some profit-taking, which may limit short-term upward momentum and instead pave the way for consolidation," said Ryan Lee, Chief Analyst at Bitget Exchange.
Bitcoin and Ethereum continue to face the risk of extreme volatility due to changes in market sentiment, aided by the increased number of leveraged outstanding contracts currently displayed in the market environment, Lee told Cointelegraph.
Investors should remain vigilant against any 'hawkish' stance from the Federal Reserve, or the potential delay in interest rate cuts could reveal major market drivers, Lee added.
Market pricing indicates an 82% probability that the Federal Reserve will keep interest rates unchanged at its next Federal Open Market Committee meeting on September 17, according to the latest estimates from CME Group's FedWatch tool.
