Two massive whales turned losses into profits: Over 2.6 billion whales competed around the 3,200 mar

At the beginning of January, there was a rare divergence in the flow of funds on the chain. Monitoring data shows that institutional investors, represented by Trend Research, continued to increase their positions in spot assets. At the same time, major traders on the Hyperliquid perpetual contract opened short positions with nominal values exceeding $100 million each. The convergence of bull and bear forces on the same asset led to a direct confrontation between spot buyers and derivatives short sellers, resulting in a rapid rise in implied volatility. This financial structure not only increases the uncertainty of short-term market movements but also makes this battle between institutions and large-scale traders one of the most anticipated events on the chain at the beginning of 2026.

Fund and position structure: Spot buying vs. contract short selling

● Institutional spot side: Chain data indicates that the intensity of buying activities directed towards Trend Research’s related addresses increased significantly. The cumulative amount of buying for a single asset reached tens of millions of dollars, indicating a typical “gradual accumulation” strategy, rather than a one-time bulk purchase.

● Contract short side: On the decentralized contract platform Hyperliquid, a major trader opened large short positions in the same asset. The total nominal position size exceeded tens of millions to hundreds of millions of dollars. This created a clear directional contrast with Trend Research’s spot long positions.

● Leverage and duration: The majority of positions on the contract side are perpetual contracts, with a focus on short-term to medium-term trading strategies. In contrast, there is almost no high-frequency trading on the spot market side, indicating a more long-term allocation approach. This mismatch in duration means that short-term fluctuations have a much greater impact on the profits and losses of short positions compared to long positions in the spot market.

● Sources of funds and liquidity within the market: On the contract side, funds use collateral within the platform to directly amplify nominal exposure, thereby increasing their actual influence. Meanwhile, buying spot assets on the blockchain tends to concentrate ownership of tokens in the hands of a single entity, reducing the market’s ability to supply tradable tokens promptly.

● Inventory and open interest: On Hyperliquid, the number of open contracts related to certain assets significantly increases, aligning with the increase in positions held by Trend Research. This creates a typical hedging pattern where “blockchain inventory + on-market open interest” both rise together.

Deep logic: The structural tension between spot asset accumulation and derivative short-selling

This financial competition isn’t simply a conflict of directions, but rather a collision of two different market participation logics.

On one hand, buyers of spot assets, represented by Trend Research, prioritize the actual tokens they hold on the blockchain and the potential for long-term value appreciation. They continue to accumulate assets during price corrections or fluctuations, thereby strengthening the long-term effect of token concentration and reduced trading volume.

On the other hand, large investors on Hyperliquid use perpetual contracts to amplify nominal short positions. They focus more on short-term to medium-term price fluctuations and capital gains. Their profit-making strategy relies heavily on prices deviating downward within a limited time frame, or staying below the level at which they entered the market.

Under the current structure, long positions in spot markets continue to push up the cost threshold for investors. Meanwhile, short positions in futures contracts accumulate nominal exposure within the platform. Together, these factors increase the price’s sensitivity to changes in incremental capital and market sentiment. When there are unilateral flows of capital or sudden changes in macro-economic conditions, such a situation where high-leverage short positions concentrate their assets near the spot market can easily lead to sharp short-term fluctuations, potentially even leading to forced selling or panic-induced liquidations.

There is a debate between long and short perspectives: should we focus on value-based strategies, or opt for hedging at high prices?

Around these hedging positions, market opinions are clearly divided.

Those who favor long positions believe that Trend Research’s continuous purchases in the spot market are actually attempts to achieve long-term value-based strategies through temporary corrections. Their large-scale purchases are seen as representatives of “real buyers”. Especially when a single entity takes over a large portion of the shares, some investors interpret this as strong confidence in the underlying asset’s long-term fundamentals and prospects for the industry.

In contrast, those who focus on risks look at the high-leverage short positions in highly liquid markets. They believe that large short positions themselves serve as a warning sign regarding short-term valuation and price increases. With leveraged funds willing to place bets downward, it indicates that at least some professional investors doubt the value of the current price range. At the same time, they are concerned that high-position shares may face rapid selling pressure during macro-economic fluctuations or shifts in market sentiment.

Some experts believe that these two types of positions may represent hedging strategies across different time dimensions: spot traders risk short-term fluctuations in exchange for potential long-term returns, while contract short sellers attempt to extract profits from short-term price movements. The divergence between the two approaches will ultimately be resolved through the combined evolution of prices, time, and trading volume.

Outlook for the future market: Attention should be paid to key points such as closing positions and increased trading volume

. In the short term, the market will focus on several key variables:

First, there is a need to observe whether there are signs of significant reduction or passive liquidation of short positions by those with highly liquid positions;

Second, it is important to see if related addresses on the blockchain continue to attract net inflows and absorb more capital;

Third, it is crucial to determine whether prices will break above or below the current range with increased trading volume. If prices continue to rise with increased buying pressure, and if bulls have an advantage due to higher interest rates within the platform, then contract short sellers may be forced to close their positions above the resistance level, leading to further volatile movements.

Conversely, if macro sentiment deteriorates or if the logic behind certain markets becomes unfavorable, then spot traders’ profit margins will shrink, and some capital may be forced back into the market. This could create conditions for contract short sellers to make profits, making this hedging strategy more likely to succeed in a downward trend.

For ordinary investors, during periods of intense competition between bulls and bears, with leverage levels rising significantly, it is essential to focus on position management and risk control. While observing changes in the behavior of key investors, it is also important to avoid getting caught up in volatile market movements.