Bitcoin (BTC) Whale Opens a $1000000000 Short Position on Hyperliquid, Targeting a Near-term Correction

This bold move, reported by blockchain analytics platforms, signals a bearish outlook from a major player and has sparked intense speculation about Bitcoin's near-term price action.

A cryptocurrency whale has made a massive $1 billion short position on Bitcoin (BTC) with 40x leverage on Hyperliquid, a decentralized derivatives exchange, according to blockchain analytics platforms.

This signals a bearish outlook from a major player in the market and could have broader implications for Bitcoin’s near-term price action, which is currently facing pressure to break below $104,000.

What Happened: Bitcoin Whale Opens $1 Billion Short Position

On-chain data from platforms like Look on chain and Alphractal show that the whale, known as Qwatio, deposited 2.3 million USDC to Hyperliquid and opened a 40x leveraged short position on 826 BTC, valued at around $1 billion, at a price of $105,168. The trade was executed around May 21.

The whale’s liquidation price is estimated at $106,600, meaning a Bitcoin price surge above this level could wipe out the position. As of Friday morning, Bitcoin is trading at $104,885, down 0.45% in the last 24 hours, placing the trade in a precarious position.

The identity of the whale remains pseudonymous, but their wallet activity suggests they are a sophisticated trader or institutional player with a history of large-scale trades. Unlike James Wynn, a well-known trader recently associated with massive long positions on Bitcoin (including a $1.25 billion long bet), this whale’s bearish stance contrasts with the broader bullish sentiment in the market.

This short position suggests that the whale anticipates a near-term correction in Bitcoin’s price, possibly driven by profit-taking after Bitcoin’s rapid rise above $100,000 or macroeconomic factors like U.S.-China trade tensions.

Where Is the Liquidation Price, and What Could Happen Next?

Posts on X indicate that market makers may be “chasing” this short, aiming to close the position and trigger a short squeeze. A significant increase in buying pressure could pour more fuel on the fire, potentially pushing Bitcoin to a new all-time high.

However, some traders believe that Bitcoin's recent price action suggests a double top pattern, which could lead to a deeper correction.

"We might see a 30% chance of a pullback to $100,500 and a 15% probability of a flush to $95,800 if we break the neckline and the pennant support, setting the stage for a continuation toward the $97,000-$98,500 support range," a trader noted.

The Formation of a Bearish M Chart Pattern

An M chart pattern, also known as a triple top, is formed when a security reaches a peak price three times in a relatively short period. This pattern is typically bearish and signals a potential reversal of the current uptrend.

The first top in this pattern occurred on January 5, 2025, when Bitcoin reached a high of $78,000 before pulling back to the $70,000 support level. The second top was formed on February 20, 2025, at a price of $76,000, marking the apex of a steeper rebound from the $60,000 support.

After a third attempt to break above the $80,000 resistance, Bitcoin experienced a steeper decline, finally finding support at the $60,000 level. This final decline completed the M chart pattern, which is now being priced in by market makers.

Moreover, traders are also discussing the possibility of a bearish pennant pattern, which could indicate a continuation of the bearish trend with a 30% chance of pulling back to $100,500 or a 15% probability of a deeper flush to $95,800 if the pennant breaks down.

"This pennant formation, if valid, suggests a continuation of the move down to 100.5 with a 30% probability or a deeper flush to 95.8 with a 15% probability if we break the pennant and the neckline."

The pennant pattern is formed by a converging set of price channels, which typically occurs during a period of low volatility. The pattern is usually named after the shape of the pennant, which can be rectangular, triangular, or trapezoidal.

In the case of Bitcoin, the pennant pattern is being formed in the lower price channels, while the upper price channels are highlighting the pennant's height.

The pattern is signaling a continuation of the broader downtrend that began in January when Bitcoin failed to close above the $107,000 neckline. A break below the pennant could open the door for a deeper decline