HYPE Short Seller Holds Firm on $100M Position Despite Mounting $22M Loss
Technical indicators point to exhaustion in HYPE's upward momentum near all-time high levels, with potential for a 20% correction toward the $45–$51.5 support area.
Despite accumulating unrealized losses exceeding $22 million, a major Hyperliquid (HYPE) whale continues to maintain a substantial short position while the token continues its upward trajectory.
Key takeaways:
- Year-to-date gains of 134% for HYPE, combined with growing ETF capital inflows and additional whale buying activity, could intensify the pressure on the short position holder.
- Chart patterns indicate the possibility of a 20% downward correction targeting the $45–$51.5 range.
Major trader expands HYPE short position beyond $100 million
Data from HypurrScan reveals that as of Thursday, the cryptocurrency wallet identified as '0x8ef...' maintained a 5x cross-margin short position consisting of 1.80 million HYPE tokens, representing a total value of approximately $102.98 million, with the position opened at an average entry point near $44.96.
Given HYPE's current trading price around $57.30, the trader faced approximately $22.18 million in unrealized losses. While the position had generated roughly $204,522 through funding payments, this amount provided minimal relief against the escalating losses as HYPE climbed nearly 8% during intraday trading.
Earlier in the day on Thursday, the short position's value stood at approximately $95 million, indicating that the whale has expanded exposure even as losses continue to mount. The position faces potential liquidation should HYPE's price climb to approximately $69.
Intensive HYPE buying activity threatens to amplify whale's red ink
Among 2026's top-performing digital assets, HYPE has recorded gains of approximately 134%, standing in sharp contrast to the broader cryptocurrency market's 16% decline.
Much of this appreciation materialized throughout May as investor focus shifted toward the newly introduced US spot HYPE exchange-traded funds and the announcement of Coinbase serving as the official treasury deployer for USDC within the Hyperliquid ecosystem.
Following their May 12 debut, these exchange-traded funds have garnered $58.73 million in capital through consistently growing daily inflows, based on figures compiled by data provider SoSoValue.
According to intelligence gathered by Arkham Intelligence, a cryptocurrency wallet associated with Galaxy Digital acquired 158,100 HYPE tokens valued at $8.8 million across a two-hour timeframe, while a freshly created wallet extracted 536,247 HYPE tokens worth $29.87 million from Coinbase during a two-day period.
Combined, these entities either purchased or withdrew approximately 694,500 HYPE tokens, representing a total value approaching $38.67 million. Such significant accumulation activity may further compound the losses facing the already struggling short position holder.
According to CoinGlass data, Hyperliquid recorded $36.33 million in total liquidations on a 24-hour rolling basis as of Thursday. Short position liquidations comprised $34.29 million, representing approximately 94% of all liquidations, whereas long position liquidations totaled merely $2.03 million.
This data demonstrates that HYPE's price appreciation is substantially fueled by short sellers being forced to cover their positions, escalating the squeeze risk facing the underwater whale should prices continue their ascent.
Technical analysis suggests HYPE may face 20% pullback
Signs of upward momentum exhaustion are emerging in HYPE's rally as the price approaches the upper boundary of its ascending price channel.
This resistance level is positioned near the $59–$60 range, coinciding with the area where HYPE established its September 2025 all-time high before experiencing a decline exceeding 65%.
The daily relative strength index (RSI) has additionally advanced to approximately 77, representing the highest reading observed since May 2025, placing HYPE decisively within overbought conditions.
Should prices reject this confluence of resistance levels, HYPE could retreat toward the 0.618–0.786 Fibonacci retracement zone, situated near $45–$51.5. This price range corresponds with the channel's lower supporting trend line.
Put differently, HYPE's price faces the prospect of declining as much as 20% from present levels should market participants begin securing profits in proximity to the channel's upper boundary.
Such a correction would allow the short seller to recover between approximately $10.4 million and $22.1 million from current levels, although the position would only achieve profitability below the $44.96 entry point, not accounting for funding payments and transaction fees.