An active whale on HyperLiquid recently completed a closed-loop operation of "selling spot BTC → high-leverage short BTC/ETH/SOL → closing all positions," with on-chain and exchange monitoring data indicating that this round of positions generated profits exceeding $3.96 million. Meanwhile, the trading volume on leading Perp DEXs slightly declined during the holiday period, but the scale of open contracts remains substantial. High-leverage whales are concentrating their long and short positions on major assets like BTC and ETH, as well as niche targets like AAVE and TST, amplifying short-term volatility and reshaping market sentiment.
Recently, based on the capital flow and on-chain behavior from HyperLiquid, investors need to pay close attention to: whether whales continue to pile up high-leverage short positions, the structure of open contracts and funding rates on leading Perp DEXs, and the direction of capital rotation between large-cap coins and small-cap tokens. These factors will collectively determine the short-term volatility and potential chain liquidation risks.
Core Event
On the evening of December 24, East 8 Time, according to Onchain Lens monitoring, a certain whale that had been continuously increasing its short positions in BTC, ETH, and SOL on HyperLiquid has completed all its positions, marking the end of this round of trading with an realized profit of approximately $3.96 million. From selling 255 BTC for about $21.77 million USDC to expanding the nominal position to about $243 million before closing all positions, this whale completed a full cycle of transitioning from spot long to high-leverage short and profiting within less than a week.
Looking at the timeline, on December 19, this whale sold 255 BTC on HyperLiquid, obtaining about $21.77 million USDC, and opened 10x leverage short positions in BTC and ETH; on December 22, its BTC short position increased to 1,182.67 BTC (nominally about $105.6 million), ETH short position increased to 1,266 ETH (nominally about $5.8 million), and it also opened a 20x leverage short position in SOL for 7,883.15 SOL, nominally about $1 million; on December 23, it further concentrated its positions, raising the BTC 10x short position to 1,899 BTC (nominally about $168 million), ETH 15x short position to 18,527.5298 ETH (nominally about $56 million), and SOL 20x short position to 151,209.08 SOL (nominally about $19 million), with a total nominal position of about $243 million across the three contracts.
In contrast, another well-known address on HyperLiquid, "20 Million Swing Hunter" (0x880a), has accumulated profits exceeding $104 million since October with a principal of about $20 million, currently focusing its short positions on ETH and HYPE: nominally about $68.3 million in ETH shorts and about $41.97 million in HYPE shorts, with a total position of about $111 million, making it the largest short position on ETH and HYPE on the platform. This model of leveraging a relatively limited principal to create large directional short positions and repeatedly swing trading is structurally similar to the operations of the BTC/ETH/SOL whale this time.
The entire process has been continuously disclosed through third-party monitoring tools like Onchain Lens and Hyperinsight, leading to discussions in the media and community about "how high-leverage whales profit from short-term volatility," making this $3.96 million profit event quickly become a focal point in the derivatives market during the holiday period.
Incentive Analysis
The current round of whale operations occurs against a backdrop of overall high activity in the Perp DEX market. According to DefiLlama data, in the past 24 hours, the trading volume of mainstream Perp DEXs has slightly declined compared to the previous day, but the absolute levels remain considerable: Lighter at about $6.1 billion, HyperLiquid at about $5.64 billion, Aster at about $4.1 billion, and EdgeX at about $2.76 billion, with HyperLiquid's corresponding TVL at about $4.12 billion and open contract scale at about $7.04 billion. The slight decline in trading volume but high open contracts indicates that, in a slightly contracting liquidity environment during the holiday, leveraged positions are still accumulating, providing ample counterparties for whales to implement multi-million dollar directional bets.
On the news front, on one hand, there is the profit event from the BTC/ETH/SOL whale's high-leverage short position closing, and on the other hand, a series of parallel "on-chain big moves": Hyperinsight disclosed that "20 Million Swing Hunter" has continuously closed multi-currency short positions in the past 6 hours, currently holding about $111 million in ETH and HYPE shorts; Ai Yi monitored that three addresses collectively deposited 2.47 million USDC as margin into HyperLiquid within 24 hours, cumulatively opening about $1.69 million in TST longs, with a single entity or related address accounting for 42.3% of HyperLiquid's total open interest in TST; another address opened a 7x leverage short position on AAVE, with a position size of about $2.42 million, and placed a limit short order of $780,000 around $154, while setting a take-profit reduction at $136 and a stop-loss reduction at $196.
From a funding perspective, this BTC/ETH/SOL whale first sold 255 BTC, converting part of its spot exposure into USDC margin, and then gradually increased its position to a total nominal of $243 million in 10-20x leverage short positions. The leverage multiples and nominal scale configurations of different assets show significant differences: BTC and ETH use medium to high leverage of 10-15x, with absolute nominal scale being larger, while SOL uses a higher 20x leverage, but the initial nominal scale is relatively small, which was then quickly expanded to about $19 million. This combination of "core large-cap coins + high-beta side assets" amplifies overall volatility elasticity.
From a sentiment perspective, the community is quite focused on the whale's "initial floating loss but still holding the short position and ultimately profiting" rhythm, with some discussions questioning whether it has an information advantage, but currently, there is no public evidence supporting conclusions of insider trading or prior knowledge of price paths. More discussions actually focus on: in a high-leverage, high open interest environment, how such large directional positions amplify short-term volatility and may trigger chain liquidations, and how ordinary traders can control leverage and position risks in such an environment.
Deep Logic
If we place this event in a longer structural context, we can see several intertwined main lines:
First, the decentralized perpetual contract track maintains high activity overall in the second half of 2025, with platforms like HyperLiquid, Lighter, and Aster forming the leading camp, continuously attracting whales and programmatic funds. HyperLiquid, with $5.64 billion in daily trading and $7.04 billion in open contracts, stands out, as its on-chain architecture and matching efficiency provide a foundation for large, high-frequency, multi-asset combination trading, making it a "feasible option" rather than an occasional behavior for whales to implement 10-20x leverage shorts on large-cap coins like BTC, ETH, and SOL.
Second, the rotation and narrative linkage between sectors are also amplifying the leverage effect: on one side are large-cap assets like BTC, ETH, and SOL with strong medium to long-term narratives, and on the other side are DeFi protocol tokens like AAVE and small-cap tokens like TST. When large funds hedge or capture pullback swings on large-cap assets through short positions, while simultaneously concentrating on long or short positions on niche targets, the result is that price volatility is no longer solely driven by fundamentals but increasingly shaped by leverage structures and capital layout rhythms.
Third, the proliferation of on-chain data and automation tools has led to such high-frequency whale behaviors being continuously "amplified" and "replicated." On one hand, projects like Otomato Protocol provide users with low-threshold automated strategies and risk control tools, helping more funds participate in high-frequency games on platforms like HyperLiquid; on the other hand, monitoring tools like Onchain Lens and Hyperinsight expose whale behaviors in real-time, making "following whales" and "observing smart money" a daily routine. This transparency of information does not necessarily weaken the advantages of whales; rather, it may amplify directional leverage during emotional resonance, increasing systemic volatility.
Long-Short Game
From the long perspective, the medium to long-term logic of assets like BTC, ETH, and SOL has not fundamentally changed due to a round of short-term high-leverage short profits. The narratives surrounding the Bitcoin halving cycle, Ethereum ecosystem expansion, and high-performance public chain competition still exist. Medium to long-term funds are more focused on the chip structure, spot inflows, and institutional allocations in the larger cycle, rather than the single round of pullback itself. For bulls, such whale shorts are more like "amplifiers of pullbacks in a bull market," driving deeper technical pullbacks through high-leverage short positions when prices deviate from value or sentiment becomes overheated, objectively creating lower entry costs for spot and low-leverage longs.
The short perspective, on the other hand, focuses more on short-term valuations, funding costs, and sentiment fluctuations. This BTC/ETH/SOL whale has shifted its long exposure from spot to derivative shorts through the method of "reducing spot + high-leverage shorts," which, as a result, hedges against short-term pullback risks while also gaining additional alpha amid price fluctuations; "20 Million Swing Hunter" has leveraged about $20 million in principal to generate over $100 million in profits, currently concentrating 98.6% of its positions in ETH and HYPE shorts, reflecting a strong preference for short-cycle games. The impact of these strategies on price paths is that once a concentration of shorts forms in key ranges, it will amplify the downward speed and increase the cost for bulls to maintain high-leverage positions.
This game has clearly spilled over to other assets: AAVE experienced further price volatility after the whale opened a 7x leverage short position and set clear take-profit and stop-loss ranges; TST, meanwhile, faces significant "local dominant capital" risks with three addresses collectively holding $1.69 million in longs, accounting for 42.3% of the platform's total open interest in TST. Bulls' strategies on these assets rely more on diversifying positions, reducing leverage, or using cross-platform hedging to offset the impact of large positions on a single platform.
In this high open interest and high leverage environment, the core contradiction between bulls and bears lies not in single price movements, but in who can better manage margin and risk exposure amid volatility, thus surviving to the next opportunity.
Outlook
In the coming period, the market may switch between several scenarios:
First, if the strategy of this BTC/ETH/SOL whale is imitated by more addresses, and high-leverage shorts further accumulate on mainstream assets, then short-term declines will be more easily amplified, and the liquidation chain may extend, with funding rates and basis structures showing a more pronounced short dominance phase. In such an environment, strategies like cross-platform hedging, cash and contract arbitrage may gain more operational space, but they will also pose greater tests for trading platforms' liquidation mechanisms, risk control, and matching efficiency.
Second, if medium to long-term funds actively accumulate during each pullback amplified by whales, we can observe increased trading volume of spot and low-leverage longs during the pullback phase, significant on-chain buying, and a slow shift of positions from short to long among leading addresses. In this scenario, the role of high-leverage shorts is more akin to "cleaning up chips + compressing valuations" for long-term funds, with the subsequent price rebound or trend continuation depending on macroeconomic conditions and fundamental developments, rather than a single liquidation event.
Third, if competition among Perp DEXs further intensifies, HyperLiquid and Lighter will continue to chase each other in terms of trading volume, TVL, and open interest, and the competition on small tokens (like TST) and governance tokens (like AAVE) may become more frequent. With the proliferation of automated trading tools, more small to medium-sized funds can participate in these high-frequency strategies. At this point, the participation threshold for individuals and institutions will be lowered at the strategy level, but the requirements for risk management capabilities will actually increase.
For ordinary investors, a more actionable approach is not to attempt to replicate the high-leverage paths of whales, but to view these large position changes as "signals of leverage structure and sentiment changes," and to assist their position and leverage decisions by observing the open contracts, funding rates, basis, and margin inflows and outflows of single large addresses on leading Perp DEXs.
In this era dominated by high leverage, a $3.96 million profit from an on-chain whale is just a slice of countless gaming samples. The true value it provides is to make the market see that price fluctuations are increasingly a reflection of capital structure and risk preferences, rather than a "certain path" that can be simply predicted and replicated.
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