Author: Glendon, Techub News

On March 18, the "Hyperliquid 50x Leverage Whale," which has recently sparked heated discussions in the crypto community, shorted Bitcoin with a full position at 40x leverage, successfully profiting $5.101 million. Data from Hypurrscan.io shows that this "whale" set a historical high for its position size with 6,210.89 Bitcoins, valued at approximately $518 million, with a cost price of $83,898.2 and a liquidation price of $85,559.

According to Yu Jin monitoring, this "whale" transferred 16.75 million USDC to Hyperliquid as margin, which included all funds in its address, both principal and nearly a month’s worth of profits.

Prior to this, the "Whale Hunting Squad" was gearing up, claiming "Bitcoin will break its liquidation price today," but their public attack this round ended in failure.

According to on-chain analyst Ai Yi's monitoring, from March 2 to the present, this "whale" has a record of 9 battles with 8 wins, achieving a win rate of 88.9% and a total profit of $16.336 million. Just two hours after completing its last trade, the "whale" transferred another 500,000 USDC to Hyperliquid as margin, opening a MELANIA 5x leverage long position. As a result, MELANIA briefly rose by about 5%.

At this point, you might be curious about who this "Hyperliquid 50x Leverage Whale" is, capable of driving token prices up by its own efforts? And what is the "Whale Hunting Squad"? Let’s delve into the details of this matter.

Seven Wins in Seven Battles: Is It an "Insider" or a "Trading Master"?

As early as March 2, this "whale" began to attract the attention of some cryptocurrency KOLs by going long on BTC and ETH with 50x leverage through an address starting with 0xe4d.

Hyperliquid is a decentralized perpetual contract trading platform known for its efficient on-chain order book, zero gas fees, and trading with up to 50x leverage, making it a paradise for high-risk traders. At that time, the "whale" opened a long position exceeding $200 million with a principal of 6 million USDC.

• Bitcoin: 1,260 coins, opening price of $85,671, liquidation price of $84,629;

• Ethereum: 49,384 coins, opening price of $2,196, liquidation price of $2,133.9.

Due to the limited liquidation space of these two short positions, which was only $1,042 and $62.1, a drop of just 2.8% would trigger liquidation. Therefore, initially, this "whale" was considered the "ultimate gambler." Subsequently, the address increased its long position by 914 ETH and 41 BTC, at which point its unrealized loss exceeded $900,000.

However, the market is always full of uncertainties. Around 11 PM that night, following Trump's announcement that the presidential task force would advance a cryptocurrency strategic reserve including XRP, SOL, ADA, BTC, and ETH, the crypto market immediately experienced a surge, and the address quickly turned its losses into profits, ultimately making a profit of $6.83 million.

But due to the extreme timing of its opening and liquidation points, speculation within the community about it being "possibly an insider close to Trump" was rampant, with some even suggesting that this "whale" might be Eric Trump, Trump's second son. Thus, this "whale" earned the nickname "Insider Brother."

On March 3, this "whale" opened a $13.45 million BTC short position, just 20 minutes before the U.S. stock market opened. Again, with the familiar 50x leverage and a sensitive timing, the price difference between the opening price ($93,117.5) and the liquidation price ($94,083) was only $965.5, with an unrealized loss of $60,000. However, similar to the previous situation, the address quickly reversed its losses, ultimately exiting with a profit of nearly $300,000.

After that, the "whale" seemed to have taken a break for nearly a week until March 10. According to Ai Yi's monitoring, this "whale" had garnered the attention of 600,000 people, and it began to go long on ETH using a secondary account (address starting with 0xf3f). It used 1.95 million USDC as margin, holding 27,809 ETH (approximately $57.88 million), still at 50x leverage, but the operation was even more extreme, with the cost price and liquidation price difference narrowed to $50, meaning that a drop below this threshold would trigger liquidation.

The result was that the address ultimately made a profit of $2.15 million within 40 minutes, achieving a total profit of $9.28 million through three leveraged trades. Subsequently, this "whale" completed four leveraged trades between March 11 and 14, earning approximately $3.106 million. One of these trades directly caused the recent heated discussion surrounding the Hyperliquid liquidation event.

On March 12, this "whale" continued to increase its position until its ETH long position reached 175,000 coins, with a position value exceeding $340 million at one point. Just when everyone thought it would either take profits or continue to increase its position for higher profits, it unexpectedly chose to "self-destruct," withdrawing most of its principal and profits to compress the liquidation price, leading to the remaining over 160,000 ETH long position being "actively liquidated." Due to this action, Hyperliquid's automatic liquidation system took over the position, and its community-driven liquidity pool "HLP Vault" was forced to take over and liquidate at a high price, resulting in a loss of $4 million for Hyperliquid.

The direct impact of this event was an adjustment of Hyperliquid's contract rules. Hyperliquid reduced the maximum leverage for BTC from 50x to 40x and for ETH from 50x to 25x to limit the potential impact of large positions. Additionally, the platform upgraded its margin system, introducing new margin rules requiring isolated positions to maintain a 20% margin rate after transfers to prevent manipulation of liquidations through withdrawals.

The "Hyperliquid 50x Leverage Whale" profited $1.857 million from this event. As of the 14th, this "whale" had achieved seven wins in seven battles through two addresses. After that, it only incurred a loss of $1.15 million when opening a LINK long position.

On March 15, this "whale" once again shorted Bitcoin with a full position at 40x leverage. Interestingly, aside from some retail investors who successfully followed its trades, its multiple victories seemed to finally provoke the anger of some well-known traders, leading to a large-scale "Whale Hunting Operation" against it.

What Impact Does the Formation of the "Whale Hunting Squad" and the Liquidation of the "Whale" Have on Hyperliquid and the Market?

On March 16, cryptocurrency KOL "@Cbb0fe" posted to recruit a "Whale Hunting Squad," stating: "If you are willing to team up with this guy for a big fight, DM me. We are forming a team, and it has already gained a decent scale." Subsequently, this KOL also shared a picture indicating that "Justin Sun will join the operation."

During this period, many netizens also commented and called on the U.S. Securities and Exchange Commission (SEC) official X account, stating: "(Hyperliquid 50x Leverage Whale) looks like an organized 'Pump' (referring to artificially inflating asset prices and then selling for profit), it's time to investigate."

This "Whale Hunting Operation" lasted nearly two days and concluded yesterday, with the outcome still favoring the "Hyperliquid 50x Leverage Whale."

Cryptocurrency KOL "@Cbb0fe" commented: "The shorter closed with a profit of $9 million. We lost this battle, but we haven't had this much fun in a long time. Congratulations to the shorter!"

However, rather than a hunt, this was essentially a showdown between the team led by @Cbb0fe and the "Hyperliquid 50x Leverage Whale" along with its followers. The question is, if this "whale" were to be liquidated, would it trigger a rise in the Bitcoin market?

Theoretically, once liquidation occurs, it will inevitably trigger the forced liquidation mechanism of short contracts, meaning that an equivalent amount of Bitcoin needs to be purchased in the market to complete the settlement, which may push prices up in the short term. However, the liquidation of this "whale" does not represent a signal of "shorts being exhausted," so it may not attract more longs, especially in the current market where overall sentiment is low and investors lack confidence, leading to insufficient upward momentum for Bitcoin. Even if there is an increase, its magnitude and duration may be quite limited.

From another perspective, the frequent occurrence of trading behaviors like that of the "Hyperliquid 50x Leverage Whale" is actually an unavoidable part of Hyperliquid's growth process, helping it discover the vulnerabilities of its mechanisms when facing extreme market behaviors. After all, as an emerging market, it has yet to undergo long-term market testing.

As mentioned earlier, to prevent a recurrence of previous liquidation events, Hyperliquid has already taken a series of measures, including adjusting the leverage multiples of contracts and increasing margin ratios to limit users from opening excessively large positions. In terms of risk management, Hyperliquid utilizes a price oracle mechanism across multiple exchanges, achieving a price update frequency of every three seconds to avoid erroneous pricing caused by malicious operations in a single market. Additionally, the platform allows anyone to participate in liquidations to enhance decentralization and has established an independent HLP Vault to act as a liquidation insurance fund, concentrating management and bearing losses caused by liquidations.

It is worth mentioning that the multiple trading behaviors of this "whale" have also brought considerable trading volume and attention to Hyperliquid. As the platform's contract market matures, the entry of market makers and the gradual increase in platform liquidity will significantly raise the cost of price manipulation, at which point the fairness and stability of the market will further be ensured.

As for whether this "Hyperliquid 50x Leverage Whale" is an "Insider Brother" or a "Trading Master," and whether it can maintain its reputation as an undefeated champion, all of this remains to be tested by time.

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