Ethereum Updates: Hyperliquid’s Leading Short Seller Reduces Exposure by 65% Amid Crypto Market Volatility and Strategic Pullback

Hyperliquid’s leading short seller made a substantial cut to its risk this month, closing out positions in XPL and other multi-asset derivatives, slashing its total notional exposure from $760 million at November’s outset to just $270 million by month’s close. This adjustment signals a deliberate portfolio shift in response to increased turbulence in crypto derivatives markets, as evidenced by both on-chain data and the trading patterns of prominent market participants.

The largest short bet, which was opened when

(ZEC) hovered around $180, is now facing after significant price volatility. This trade, along with a triple-leveraged short on , stands in contrast to the whale’s $241 million in long positions on and . The wallet, labeled 0x9ee, currently holds $145 million in ETH and $96 million in XRP, though . On the other hand, the ASTER short has delivered $8.1 million in profits, highlighting the mixed outlook among traders.

, Abraxas Capital, another major entity, switched from shorting ASTER to taking long positions, earning $750,000 as market sentiment shifted. In contrast, Resolve Labs and “The Eternal BTC Shorter” persist with bearish bets on ETH and BTC, with the latter still holding a . These differing tactics highlight the prevailing uncertainty in the sector.

Hyperliquid’s own token, HYPE, has

, with futures open interest plunging 38% since late October. The breakdown below its 200-day EMA and a bearish MACD crossover both point to sustained selling pressure. Adding to investor worries, Hyperliquid —a step that leaves deposits and withdrawals unaffected but has nonetheless heightened market anxiety.

Liquidity issues have become more pronounced. Hyperliquid’s market maker suffered a $5 million setback,

, exposing weaknesses in the DEX’s design. In this case, a trader artificially drove up bid prices before unwinding large long positions, forcing the market maker to take on losses. Such incidents underscore the delicate nature of liquidity in rapidly changing crypto environments.

Large traders across the crypto landscape are engaged in a battle between locking in profits and making bold bullish plays. One “BitcoinOG” closed a

, netting $2.8 million in gains, while another investor remains highly leveraged on ETH and (DOGE), while holding shorts on and . According to Santiment, , with major wallets (those holding 100–100,000 ETH) fueling much of the asset’s recent 87% surge.

The short seller’s withdrawal from Hyperliquid positions mirrors a wider move toward caution in crypto derivatives. As both institutional and retail participants contend with regulatory changes and macroeconomic pressures, the market’s dependence on whale activity remains a double-edged sword—capable of sparking rallies, but just as likely to intensify volatility.