This week, in the Eastern Eight Time Zone, market sentiment has rapidly heated up around the actions of two major on-chain whales who are leveraging their positions to buy Ethereum against the trend. While the price of ETH is under downward pressure, massive amounts of capital continue to accumulate long positions on-chain, and these positions are now overall in a state of unrealized losses. With reports from several Chinese media amplifying the news that Trend Research and "7 Siblings" collectively control about 1.25 million ETH, this leveraged capital hanging over the market has quickly become the focus of investor discussions. Amid rising global risk aversion and a general retreat in risk assets, the massive bets by whales and the prevailing panic sentiment are colliding head-on, pushing debates about liquidation, cascading sell-offs, and whether "smart money" will falter to the forefront.

650,000 ETH Stuck: The On-Chain Capital Behind Yi Lihua

Regarding the on-chain holdings of Trend Research, the market currently relies mainly on on-chain tracking and data cross-verification from media reports. Several Chinese media outlets cite analysts who estimate that the Trend Research address holds approximately 651,300 ETH, which, at the current ETH price, is about $1.92 billion, with an overall average entry price around $3,180. The current market price is significantly below this level, corresponding to an estimated unrealized loss of about $163 million. This figure was not actively disclosed by the parties involved but comes from calculations and reports based on on-chain data by several Chinese media outlets like Foresight. What makes the market more anxious is that this cluster of addresses has not been gradually taking profits during the upward phase but has been continuously adding positions during the decline of ETH, compounded by the use of leverage, resulting in a high concentration of large long positions visible on-chain. Since Trend Research and related individuals have never formally confirmed the structure and strategy of these holdings, the outside world can only piece together facts from the visible on-chain traces and media reports. This state of "visible scale, unclear details" has amplified investors' imagination regarding their leverage risk.

The DeFi Leverage Chain of 590,000 ETH Across 7 Addresses

In contrast to the concentrated holdings of Trend Research, "7 Siblings" appears more as a group of interrelated addresses in on-chain analysis. On-chain tracking shows that they have deposited approximately 596,800 ETH through 8 addresses in the Spark protocol, which, according to public reports, amounts to about $1.765 billion, making them one of the largest depositors in the protocol. Based on this, this capital cluster has also borrowed about $193 million in USDT and other assets on Spark, thereby amplifying their long leverage exposure. In an environment where prices are falling and borrowing rates are rising, they are directly facing dual pressures from both the market and interest rates. Because their size in the Spark protocol is substantial, any extreme market conditions that approach liquidation could lead to passive deleveraging that might impact the sentiment and liquidity of the entire DeFi ecosystem. Current public reports regarding the specific composition of the borrowed assets mostly cite individual analysts' judgments, lacking more comprehensive and authoritative confirmation, and research briefs clearly list this detail as pending verification. With key parameters like currency structure remaining vague, the market can only speculate on risk around the keywords "massive leverage exposure" and "liquidation sensitivity."

The Chain Reaction if 1.25 Million Chips are Triggered

When Trend Research and "7 Siblings" are placed on the same chart, the concentration of on-chain leverage truly becomes apparent. Data from multiple sources indicates that the two parties collectively control about 1.25 million ETH, with most concentrated in leveraged scenarios. This means that if the market continues to decline and approaches liquidation zones, this portion of capital could quickly turn into a source of passive selling pressure. For ETH, such a scale of passive deleveraging is not merely a profit and loss issue for a single account; it is more likely to transmit through the DeFi liquidation mechanism on-chain. When prices fall below certain key thresholds, the value of collateral assets rapidly diminishes, and liquidation bots and arbitrage funds will dispose of assets in a very short time, creating a cycle of "price drop—insufficient collateral—forced selling—further price drop." Under the premise of highly concentrated leverage, the speed and intensity of this cycle could be significantly amplified. More troubling is that the market currently lacks precise, publicly available liquidation prices and tiered liquidation data; research briefs also classify such information as highly sensitive parameters that should not be fabricated. Investors can only know that "there is a large amount of leverage below," but it is difficult to outline the actual triggering range. This information asymmetry and uncertainty further fuel the imagination of a "liquidation waterfall" that continues to ferment on social platforms.

Contrarian Bets Amid Rising Japanese Yields and Geopolitical Risks

The on-chain narrative stands out in this round of market conditions partly because it is juxtaposed with the macro environment under a microscope. QCP Asia mentioned in their latest insights that the rising yields of Japanese government bonds and the tense geopolitical situation are pushing up global risk aversion preferences. Traditional funds, in this context, are more inclined to flow into assets considered safe, tightening their risk exposure to high-volatility assets. As the macro environment cools and risk assets generally retreat, this should be a typical window for deleveraging and preventing drawdowns. However, while ETH prices are under pressure, the two major on-chain whales have chosen to continue amplifying their long positions during the downturn, forming a stark counterpoint to the defensive posture of macro funds. On one side, institutions and traditional funds are reducing risk, while on the other, leading on-chain accounts are leveraging against the trend. This misalignment itself increases the tension in market dynamics. If the whales' judgment proves correct, they will gain amplified upside returns at a lower cost; but if macro risk aversion continues to rise and risk assets face a deeper round of adjustments, such high-leverage layouts could evolve from individual aggressive trades into a market-level volatility amplifier, compressing what could have been a slow digestion of declines into a more severe downturn under the chain reaction of liquidations, liquidity tightening, and confidence erosion.

Retail Investors Watching Whales' Accumulation Emotional Loop

Compared to the previous cycle, the increase in on-chain transparency and information dissemination efficiency has made such whale behaviors no longer secret intelligence held only by professional institutions. Now, when whales accumulate during a downturn, changes in related on-chain addresses are often seen as signals of "smart money entering," quickly captured, interpreted, and shared across various social platforms, triggering waves of follow-the-whale bottom-fishing sentiment. Some retail investors, driven by the narrative that "whales are buying," increase their bets, tying their risk preferences to the strategies of leading players. However, when the scale of unrealized losses is prominently presented by the media, such as the repeatedly cited $163 million unrealized loss, it can also intensify retail investors' panic about "liquidation cascades." The combination of transparent on-chain data and amplified public discourse means that every whale's accumulation, adjustment, or even silence is given excessive interpretation; their actions are no longer just results of their own position management but constitute a public event on an emotional level. The expectations of whales and retail investors continuously project onto each other in this scrutiny: some investors believe that "standing with whales can weather volatility," while others worry about becoming "the last stick before liquidation." Thus, near the potential liquidation price of the whales, it is often easier to accumulate transactions and emotions, forming a highly confrontational divergence of long and short forces with intense narrative swings.

Will Whales Laugh Last or Trigger the Entire Market?

From a longer time perspective, this total of about 1.25 million ETH in on-chain leveraged positions represents both a high-risk gamble by the two major whales on future market conditions and a potential minefield that the entire market must confront. If the macro risk aversion cycle gradually eases, and ETH reclaims the large-scale accumulation zone of the whales, the currently perceived "leverage hanging overhead" will later be rewritten as a classic case of successfully expanding capital amid panic, reinforcing retail investors' faith in narratives like "buying the dip" and "on-chain leverage," and even prompting more funds to replicate similar strategies in the next round of volatility. Conversely, if the market continues to weaken, with ETH prices repeatedly testing downward, triggering large-scale passive deleveraging, this round of adjustment may no longer be dominated by simple macro expectations or spot sell-offs, but evolve into a major cleansing of high-leverage participants under the interplay of on-chain liquidations, collateral disposals, and liquidity contractions. At this stage, the absence of key liquidation parameters and precise accumulation rhythms, combined with the noise of fluctuating messages on social media, makes it easier for investors to oscillate between "buying the dip with whales" and "avoiding minefields." In such an uncertain environment, rather than simply mimicking the whales' leverage actions, calmly identifying one's risk tolerance and cautiously approaching on-chain leverage tools may be the basic principles that most participants need to adhere to.

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