Overleveraged ETH Whale Faces Liquidation After $19M Loss
An overleveraged ETH whale opened 70,000 ETH in short positions on July 28 and rolled perpetual contracts instead of taking profits, despite $12.25 M in unrealized gains by August 3.
A chain of forced liquidations and triggered stop losses whittled the position to 12,500 ETH before a final liquidation at $4,095, crystallizing a net loss of about $19 M.
The ETH whale has since reopened over $127 M in ETH shorts, raising liquidation risk and straining market liquidity. Traders should brace for heightened market volatility and reevaluate leverage and risk management strategies.
Bearish
The overleveraged ETH whale’s forced liquidation and the reopening of $127 M in ETH shorts are likely to exert significant downward price pressure in the short term, as deleveraging triggers more selling and strains liquidity. Heightened liquidation risk can amplify volatility, prompting cautious sentiment. In the long term, market stability hinges on how other traders adjust leverage and risk controls; if similar overleveraging persists, price volatility may remain elevated, but a potential short squeeze could occur if ETH bottoms are reached.