The mysterious whale trader responsible for Hyperliquid’s $4 million vault loss has returned, executing another round of high-leverage trades across multiple platforms. This time, the trader deposited $4.08 million USDC into GMX, initially shorting Ethereum (ETH) before quickly flipping to a long position—securing a $177,000 profit.
Following the profitable GMX trade, the whale shifted $2.3 million USDC into Hyperliquid (HYPE), opening a 25x long position on ETH and a 40x short position on Bitcoin (BTC). These aggressive moves have sparked speculation: Is this skilled trading or an exploitative play on liquidation mechanics?
On-Chain Data Reveals High-Stakes Strategy
On-chain data from Lookonchain unveiled the trader’s latest positions. The ETH long position on Hyperliquid, worth $30.54 million, has an entry price of $1,886.20 and a liquidation price of $1,804. Meanwhile, the BTC short position, sized at $19.09 million, has an entry price of $83,156.45 and a liquidation price of $88,844.
The whale deposited 4.08M $USDC into #GMX to short $ETH but quickly closed the position and switched to a long, securing a $177K profit.
— Lookonchain (@lookonchain) March 13, 2025
He also deposited 2.3M $USDC into #Hyperliquid to long $ETH with 25x leverage and short $BTC with 40x leverage.https://t.co/vIX1XCbKfp pic.twitter.com/WIGIawFoix
This high-risk, high-reward strategy hinges on precise market timing. The whale’s ability to shift capital rapidly between GMX and Hyperliquid suggests a liquidity-optimized approach, maximizing profit from small price movements.
Déjà Vu? A Pattern of Market Manipulation
The similarities between today’s trades and yesterday’s liquidation event cannot be ignored. Just a day ago, this same whale withdrew margin from Hyperliquid before liquidation, forcing the HLP Vault to absorb losses. Now, the trader has returned with even larger positions, raising concerns over potential manipulation.
The rapid transitions between short and long positions indicate an acute awareness of liquidation engine behavior—possibly exploiting inefficiencies in automated risk management systems.
The DEX vs. CEX Leverage Debate
The incident has reignited debate over leverage limits on decentralized exchanges (DEXs) versus centralized exchanges (CEXs). Bybit CEO Ben Zhou weighed in, stating, “Leverage is a double-edged sword—reducing it may be necessary, but it also hurts business as traders seek higher margins.”
While Hyperliquid has already reduced leverage limits (40x for BTC and 25x for ETH), these measures failed to prevent today’s whale trades. Analysts suggest that open interest limits, improved liquidation mechanisms, and market surveillance could help curb manipulation without centralizing risk management.
Hyperliquid is already feeling the impact. Dune Analytics data revealed net outflows of $166 million on March 12—the same day the whale’s position was liquidated. As traders question the sustainability of high-leverage trading on DEXs, Hyperliquid faces a defining moment.
Also Read: Selloff Hits HYPE Price as Hyperliquid Faces $166M Outflows After ETH Whale Liquidation
Will new liquidation innovations emerge, or is high-leverage DeFi trading on the brink of fundamental change?
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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