A cryptocurrency investor turned $125,000 into millions in profit by trading ETH on a decentralized exchange, achieving this feat after a recent surge, as large investors began to take profits.
Blockchain data platform Lookonchain noted that this skilled trader transformed an initial investment of $125,000 into a peak profit of over $43 million in just four months, until a recent market adjustment affected his ETH long position.
According to Lookonchain, despite facing downward market pressure, the trader decisively closed all positions on Monday, successfully locking in a net profit of $6.86 million, achieving an impressive 55-fold return on investment.
Lookonchain stated in a post on the X platform on Sunday that after depositing the initial $125,000 into the decentralized exchange Hyperliquid, the trader "cleverly utilized a compounding strategy, reinvesting every dollar of profit into the ETH long position, ultimately building a massive position worth up to $303 million."
Market analysts indicated that traders often monitor the trading patterns of "whales" (large investors) to assess the short-term momentum of related cryptocurrencies, as the amount of capital these investors hold is sufficient to influence the overall market direction.
According to data from Farside Investors, U.S. spot ETH exchange-traded funds (ETFs) experienced an outflow of $59 million last Friday, breaking a previous streak of eight consecutive days of net inflows.
Following the ETF outflows on Friday, more ETH whales have begun to lock in profits in anticipation of potential adjustments during the remaining market closure period in August.
Data from Nansen showed that on Monday, a wallet labeled "0x806" (one of the top 100 ETH traders tracked by Nansen) sold over $9.7 million worth of ETH, marking the second-largest ETH sell-off transaction in the past 24 hours.
Another top 100 ETH trader, wallet "0x34f," sold $1.29 million worth of WTH, along with numerous other whales selling millions of dollars worth of this second-largest cryptocurrency globally.
Ryan Lee, chief analyst at Bitget exchange, pointed out, "The strong performance of ETH has triggered some profit-taking behavior, which may limit its immediate upward momentum and lay the groundwork for market consolidation."
Lee told Cointelegraph that the growth in open interest reflects an expansion of leverage in the current market environment, making BTC and ETH "still susceptible to more severe volatility when sentiment shifts."
Lee added that investors should remain cautious of any potential "hawkish" stance from the Federal Reserve or delays in interest rate cuts, as these remain key drivers in the cryptocurrency market.
According to the latest predictions from the CME Group's FedWatch tool, the market expects an 82% chance that the Federal Reserve will maintain interest rates at the next Federal Open Market Committee meeting on September 17.
Related: Ethereum (ETH) technical chart suggests: a potential retest of $3,900 before a 100% surge to new highs
Original article: “ETH Trader Turns $125K into $43M, Locks in $7M Profit After Market Downturn”
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