A trader who recently profited $192 million by shorting the crypto market just before a major crash is reportedly taking a similar bearish stance again. This has sparked controversy and speculation within the crypto community.
The trader, identified by the address "0xb317" on the Hyperliquid decentralized derivatives exchange, has opened a $163 million leveraged perpetual contract to short Bitcoin (BTC). The position uses 10x leverage, and profits are currently valued at $3.5 million. However, the position faces liquidation if Bitcoin reaches $125,500.
The initial short position taken by this trader gained notoriety due to its suspiciously close timing to President Trump's announcement of tariffs on Chinese goods. This announcement triggered a significant downturn in the crypto market on October 10, leading to over $19 billion in liquidations. Bitcoin plunged from above $125,000 to briefly below $102,000, and Ethereum dropped to below $3,800. The trader's $192 million profit, made in under two hours, has led many to label them an "insider whale," suggesting the possibility of privileged information.
The October 10 crash was triggered by President Trump's announcement of 100% tariffs on Chinese goods, which sent shockwaves through global markets. The announcement, which came after traditional markets closed, created an environment ripe for volatility due to reduced liquidity. The market downturn led to a cascade of liquidations as leveraged traders were forced to close their positions.
While Bitcoin demonstrated relative resilience during the crash, dropping 15% to $104,000, other cryptocurrencies like Solana and XRP plummeted. The crash exposed vulnerabilities associated with leveraged trading, particularly on platforms offering high leverage.
The recent market volatility has led to a drop in open interest as traders exit risky positions, signaling a decreased appetite for investment. Amidst the uncertainty, some traders have rushed to safe-haven assets like gold and silver.
Analysts are divided on the long-term consequences of the crash. Some believe it was primarily a technical correction without lasting fundamental impact, while others point to excessive leverage and the potential for a prolonged trade war as causes for concern. Despite the recent downturn, some analysts remain optimistic about Bitcoin's prospects, citing its regained dominance and the continued adoption of ETFs.
