Twelve seconds, fifty thousand ETH, and a fortune that evaporates. The address “pension-usdt.eth” was among the most successful short sellers of the year, with nearly $49 million in gains accumulated by betting against cryptocurrencies over several months.
On Thursday, on the Hyperliquid derivatives platform, this same trader saw his short position of 50,000 ETH forcibly liquidated. In just twelve seconds. Enough to erase almost half of your earnings for the year, with a single algorithmic click.
The mechanism is due to a domino effect well known to those accustomed to leverage trading. A short position (a bet on the price falling) becomes too risky when the market goes up instead of down. The platform then forces its liquidation, that is to say its immediate buyout. The objective? Avoid that the loss exceeds the guarantee deposited by the trader.
And precisely. The price of Ether was already climbing sharply yesterday, driven by the same wave of liquidity as Bitcoin. The 50,000 ETH short got trapped right in the rally. On Hyperliquid as elsewhere, this type of position is opened with a security deposit representing only a fraction of its real value. Enough to multiply both gains and losses.
5 transactions in 12 seconds
But our story doesn’t end there! The liquidation was carried out in five successive forced sales, each a little more expensive than the previous one. Each buyback mechanically pushed the price of Ether upwards, making the next portion of the position even more expensive to buy back.
The move caused Ether to rise by $43 during the operation, just under the effect of this forced cavalcade. At the end of the chain, Hyperliquid's insurance fund had to absorb the last 1,417 ETH that the market could no longer digest smoothly.
In this capture, we can clearly see the five main blocks of the forced liquidation.
The first large order (9,989 ETH) executes around $2,212, followed immediately by 20,698 ETH towards $2,244 and 15,830 ETH at $2,237. Next comes 1,871 ETH near $2,241, then the final balance of 1,417 ETH absorbed by Hyperliquid's insurance fund at $2,247.
In less than fifteen seconds, these five successive transactions generated more than $26 million in losses and themselves contributed to driving up the price of Ether by several dozen dollars.
A purge that goes far beyond a single trader
This individual episode is only the visible part of a much larger movement. Over the 24 hours surrounding this liquidation, $2.74 billion in short positions jumped across the entire crypto market. One symptom among thousands of others, not an isolated case.
The simultaneous rise of Bitcoin and Ether took a large part of the short sellers by surprise, who were betting on a loss of steam in the market rather than on a new bullish leg. Journal du Coin had already noted a comparable pattern in July, when a whale lost $19 million on Ethereum during a similar purge against the backdrop of a sudden market rebound.
A seasoned trader overtaken by his own confidence
However, the trader is not a beginner. Its short-selling strategy had earned $49 million over the year, which had been rather well received by the market so far.
But leveraged markets do not forgive overconfidence for long. The bigger a position is, the more it itself becomes a risk factor when the tide turns.
