- Whale deposits $11.23M USDC, shorting $HYPE with 3x leverage for $2.4M profit, while buying $5.08M, creating a hedging strategy.
- Conflicting signals: whale bets against the token with a short, yet accumulates long positions, suggesting either hedging or long-term accumulation.
- Whale’s actions may be market-neutral, profiting from volatility, or manipulative, aiming to create confusion and exploit price swings
A savvy whale is shorting HYPE as well as buying it. On-chain data showed how the investor deposited a staggering $11.23 million $USDC into the DEX and opened a short position on the token with 3x leverage, netting a floating profit of $2.4 million.
However, when they bought 87,417 $HYPE tokens for $5.08 million at an average price of $13.12. This long position has a floating loss of $270k. Such trading strategy is called a hedging strategy, which involves taking offsetting positions (short position ) to mitigate risk (long position).
Although the whale’s actions provide conflicting signs, they are not only betting against the token with the short position but also accumulating a large amount of it. Despite the loss from the long position, it could be part of the trader’s long term accumulation strategy. On the other hand, the short position might be short-term hedge against possible price dip.
Usually, in cases like this, two possibilities emerge. One, the anonymous whale might be aiming for profit against the market volatility without taking a directional bet on the HyperLiquid token. Second, it could also hint at the whale’s manipulative behaviour, designed to create confusion.
JELLY Fix & HYPE Fund Downturn
After the last week’s token incident, HLP announced compensating JELLY long position holders at a price of 0.037555, except for flagged addresses.
The DEX aims to strengthen risk management by setting limits on the Liquidator vault. If losses exceed the limit, ADL will be triggered; the open interest cap (risk control) will be dynamically adjusted in relation to market capitalization; validators will be able to decide via on-chain voting whether to delist assets with liquidity or market capitalization below the standard.
Meanwhile, the Hyperliquid Assistance Fund, which was previously buying its native token, has significantly reduced its buying activity throughout March. This decline in buybacks, coupled with the fund’s average purchase price being higher than the current market price, suggests a weakening of support for $HYPE and could lead to further price declines.
