A single crypto trader tried shorting Ethereum with max leverage on Hyperliquid and paid the price within less than eight hours. What started as an extravagant $5.08 million bet turned to disaster, and the traders exhausted their position with only $310,000 remaining.
A M Short Position on Ethereum
It began with a huge deposit: 3.36 million USDC was transferred from the user’s wallet into Hyperliquid to open a 25x leveraged short position on Ethereum. At the point of entry, the trader’s total position blew out to 41,947 ETH (approximately $92 million). Trading ETH just above $2,300, the trader was obviously predicting a sharp price fall.
The liquidation price for this risky move was $2,247.1. Such a rally that goes above that threshold would mean instant liquidation for the position.
The Ethereum Market Moved Against Him
ETH put up strong bullish momentum after the successful Pectra upgrade done earlier in the week. The trader’s position, which was once generating an unrealized gain of $658,000, then quickly became devastating losses as ETH started pumping.
Within hours, the tide changed dramatically. Although initially the short was profitable, the short was closed at a realized loss of $333.6k.
A M Wallet Turned to 0K
The wallet, which once held the original $5.08 million, now only contained $310,000 after the unsuccessful trade. That’s an appalling $4,770,000 loss over an incredibly short period of time, under 8 hours. The trader moved from what appeared to be a confident directional bet to one of the most brutal liquidations experienced thus far this month.
Gamble or Gambler’s Information Gone Wrong?
The trade had people speculating. A degenerate gamble with max leverage, was that all? Or did the trader have an insider operative who never panned out? With the ETH rally being boosted by positive sentiment, technical upgrades, and institutional flows, shorting the market at max leverage looked extremely reckless at best.
But in crypto, all it takes is one bad read, and it’s all gone.
Lessons From a Liquidation
This event is a hard lesson about the perils of over-leverage in a volatile environment. Even those traders with deep pockets aren’t safe from the forces of the market when risk is mismanaged. The strength of Ethereum’s response to such aggressive shorting only underlines its strength, and the increasing dangers of timing the top.
Whatever it was, a gamble or just plain bad luck, the end result is simple. The market humbled another gambler today.
