The whale trader who previously caused over $4 million in lost liquidity for Hyperliquid's pool is active again. This time, they took a long position on Ethereum with 25X leverage, posing new risks to the platform.
Trader Returns
The well-known whale trader, who previously led to significant liquidity losses in Hyperliquid pools, is active on the market again. In a new attempt to extract profit, the trader took a long position on Ethereum with 25X leverage. These actions once again pose a threat to Hyperliquid, causing a drop in the market price of the HYPE token to $12.35.
New Crypto Market Positions
The new positions taken by the trader totaled $2.3 million. Although this may seem like a lesser amount at first glance, using 25X leverage can have a considerable impact. The trader has also been active on other platforms and secured $177,000 profits on GMX before switching back to Hyperliquid. Ben Zhou, CEO of Bybit, speculates that such actions might be part of a strategy to exploit the liquidation mechanism intentionally.
Expert Opinions
According to Ben Zhou, such positions can be dangerous not only for decentralized platforms but also for centralized market operators. Zhou asserts that large positions should automatically lower leverage to avoid risk concentration, a sentiment shared by other experts.
The behavior of large investors on the cryptocurrency market always remains under scrutiny, especially when significant funds of platforms and users are at stake. In situations like what happened with Hyperliquid, constant monitoring and improvement of risk management tools are necessary to prevent repeat episodes.
