A BTC Whale, Leverage, and the Retail Bull Hunt That (Almost) Was 

TLDR

• A crypto whale opened a 40x leveraged short on BTC on the Hyperliquid exchange.
• Retail users on X rallied to hunt the whale in an effort to have them liquidated.
• The effort ended up falling short, and the whale switched to a leveraged long position just a few days later.

This past weekend, crypto traders had their eyes glued to an unfolding David-and-Goliath-like tale that played out on the Hyperliquid exchange. At the center of it all is a single crypto whale betting millions in a 40x leveraged short on Bitcoin (BTC) and a surprising bullish push behind MELANIA, a meme coin tethered to the Trump brand. 

On the other side of the coin? Retail traders rallied to liquidate that bet. The result? They gave it their all… until they didn’t. Here’s a breakdown of what went down and why social media and retail users are still the best underdogs in finance.  

Setting the Stage 

Bitcoin stabilized following volatile price action, hovering back near its 200-day moving average of around $84,000 (at the time of the event). But stability begets contrarians, and this time, it came in the form of a whale making waves on Hyperliquid. 

The investor (or investors) raised eyebrows with their staggering $445 million short on BTC perpetual futures. If that number wasn’t eye-popping enough, consider this: the position was backed by 40x leverage, meaning their liquidation price stood precariously at $86,000.

Add to that the whale’s hedge bet on MELANIA, a relatively obscure meme coin tied to Melania Trump, and it’s clear they weren’t just riding the crypto trend train passively. Instead, they appeared to be juggling high-risk trades with two wildly contrasting strategies.

The Short (and Rallying Bulls) 

When news of the whale’s short surfaced, the market didn’t just watch idly. Instead, traders on X saw an opportunity to flip the script. Enter pseudonymous trader @CBB, who effectively fired a rallying cry to form a “team of bulls” to push BTC prices up and force the whale’s short into liquidation.

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For context, when a leveraged short enters liquidation territory, the trader behind it faces hefty losses (especially at 40x). 

Retail bull rallies like these aim to exploit the vulnerable position of the high-leverage bettor by driving the asset’s price past the margin threshold, forcing the trader into liquidation or requiring an expensive margin top-up.

The Whale Stays Afloat 

For a brief, caffeinated moment, it looked as though the collective bull effort might succeed. The whales weren’t oblivious to the brewing storm, however. 

Facing risks of liquidation as BTC prices climbed, the whale promptly deposited several million USDC to buffer their position and keep the short alive.

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Despite what seemed like a valiant attempt, the retail bull rally ultimately faltered. BTC’s price failed to push through to $86,000, sparing the short from liquidation. The whale’s daring contrarian play remained intact, netting them an estimated $1.3 million in unrealized gains at one point.

The Twist

After all of that effort to liquidate the whale, the investor decided to flip the script on the retail users hunting them.

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The effort of these hunters. The transparency of blockchain. Everything about it is why we at Dypto Crypto believe that this financial system has the potential to be the best. It’s an interesting and fun story, but it also shows us all why decentralization and public ledgers can be superior to what we have in TradFi.

What Does This Mean for the Crypto Market? 

The high-stakes drama unfolded against the backdrop of ongoing discussions around market manipulation, liquidity concentrations, and the unique psychological warfare of crypto trading. 

For retail traders, this was a reminder that “group efforts” to take down whales often walk a razor-thin line between success and failure.

But the episode also underlines important themes for crypto enthusiasts at every stage:

• High Leverage = High Risk (For Everyone): Whether you’re the whale or the retail trader, leveraging trades amplifies both your risks and rewards. Over-leveraging, as we saw here, puts traders one small market movement away from disaster.
• Whales Move Markets: Large investors don’t just hold BTC. They steer the narrative. The whale’s multimillion-dollar short (and the subsequent rally to counteract it) demonstrated the power asymmetry still prevalent in crypto. 

It Was a Fun Story Worth Watching 

The crypto market thrives on unpredictable, big-swing events like these. For the whale, sustaining both the bearish BTC short and the bullish MELANIA long reflects a complex market strategy that likely incorporates hedging motivations. 

For the community of traders who sought to counter the short, the weekend stands as a cautionary tale about the challenges of taking down a single, well-padded foe in an increasingly mature crypto ecosystem.

The Gamestopesque squeeze didn’t happen this time. But next time? Who knows. It’s crypto, and you never know what’s going to happen.