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BTC 
ETH One of the most successful cryptocurrency short sellers this year has suffered disaster
A wallet called "pension-usdt. eth" has been betting on the decline in Ethereum (ETH) prices for two months. On the morning of August 20, the gamble collapsed and the trader's short position of 50,000 ETH (worth approximately US$106 million) was forcibly closed, resulting in a loss of US$23.92 million.
Closing process
The deal fell apart within seconds. According to the trading records of Hyperliquid, the decentralized cryptocurrency exchange where the position is located, the closing lasted from 04:51:03 to 04:51:15. In order to close the position as soon as possible, the exchange divided it into five forced sales. The first time I sold 9989 ETH at a price of approximately US$2194; the second time I sold 20698 ETH at a price of US$2210; the third time I sold 15830 ETH at a price of US$2214; and the fourth time I sold 1872 ETH at a price of US$2237. In the end, no buyers took over the remaining 1417 ETH, so Hyperliquid included it in a reserve fund established to deal with such situations.
The trap: In those 12 seconds, the price of Ethereum increased by about $43. Because closing short positions means buying assets to cover, traders 'own forced buying actions push up prices, making it increasingly costly to close remaining positions, creating a costly feedback loop.
Reversal of Pain
Considering the wallet's past record, this loss is even more distressing. This year, it has accumulated profits of approximately US$49 million by shorting cryptocurrencies, including 60,000 ETH short positions that were closed in June (a profit of nearly US$6 million) and 1400 BTC short positions (a profit of US$3.6 million). This liquidation wiped out about half of its total profits. Hyperliquid's rankings show that the account currently has only US$35.61 left, a 100% decline in the past 30 days.
This short position occurred against the background of an overall rise in cryptocurrencies. A bond repurchase announcement pushed Ethereum up about 18% in 24 hours and pushed Bitcoin from about $64000 to nearly $70000. The wallet was not an isolated case-it was just part of the liquidation of short positions totaling approximately $2.74 billion in the market that day.
