to leave a comment.
▲ Cryptocurrency Whale, Hyperliquid (HYPE)/AI Generated Image
A whale that extensively shorted Hyperliquid (HYPE) is not closing its position despite over $22 million in unrealized losses. As Hyperliquid's surge, ETF inflows, and new whale accumulation coincide, short squeeze pressure is increasing, while technical charts simultaneously suggest a potential 20% correction due to short-term overheating.
Cointelegraph reported on May 21 (local time) that a Hyperliquid whale is maintaining a large short position despite reporting over $22 million in unrealized losses. The wallet holds a short position of 1.8 million HYPE with 5x cross-margin, and the position size is estimated at approximately $102.98 million.
The entry price for this short position is around $44.96. As Hyperliquid traded near $57.30, the position loss swelled to approximately $22.18 million. Although the trader earned about $204,522 in funding fees, it was insufficient to offset the accumulated losses as Hyperliquid rose approximately 8% during the trading session.
The whale's short exposure was approximately $95 million earlier on the same day but has since grown larger. This means that even as losses expanded, the position was not reduced; rather, exposure was increased. If the Hyperliquid price rises to approximately $69, this position will be at risk of liquidation.
Hyperliquid has risen 134% since the beginning of 2026, contrasting with a 16% decline in the overall cryptocurrency market. A significant portion of this surge is attributed to market attention following the launch of a US Hyperliquid spot ETF in May and Coinbase's role as the official USDC treasury deployer for Hyperliquid. Since its launch on May 12, the Hyperliquid spot ETF has seen inflows of $58.73 million.
New whale accumulation also increased pressure on short positions. A wallet linked to Galaxy Digital purchased 158,100 HYPE, worth $8.8 million, over two hours. Another new wallet withdrew 536,247 HYPE, worth $29.87 million, from Coinbase over two days. The total accumulation or withdrawal by these two wallets amounted to 694,500 HYPE, approximately $38.67 million.
According to CoinGlass, Hyperliquid recorded $36.33 million in liquidations over 24 hours. Of this, short position liquidations accounted for approximately 94% at $34.29 million, while long position liquidations amounted to only $2.03 million. Cointelegraph reported that forced short covering is strongly pushing the rally, and if the price continues to rise, there could be a greater short squeeze risk for whales in loss.
However, technical charts also showed signs of short-term overheating. Hyperliquid is testing the upper boundary of its ascending channel and has approached the $59-$60 resistance zone. This zone coincides with the price level where a sharp decline of over 65% occurred after an all-time high was formed in September 2025.
The daily Relative Strength Index (RSI) climbed to around 77, reaching its highest level since May 2025. Cointelegraph analyzed that if Hyperliquid faces profit-taking pressure at the top of the channel, it could be pushed down to the $51.5-$45 support zone, which corresponds to the Fibonacci 0.786-0.618 retracement levels. In this scenario, there would be a risk of a correction of up to 20% from current levels.
If Hyperliquid corrects to this support zone, short position holders could recover approximately $10.4 million to $22.1 million compared to current levels. However, for the position to turn profitable, even excluding funding fees, the price would need to fall below the entry price of $44.96.
*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*
Newsletter
Get key news delivered to your email every morning
to leave a comment.