Key takeaways
How did a Bitcoin whale go short $420 million worth of BTC?
The whale deposited $80 million worth of USDC into Hyperliquid and used 5x leverage to open a $420 million short.
Does this indicate a major Bitcoin dump?
Not yet. Funding rates remain positive at 0.0043%, showing that traders are still leaning towards long positions.
An important Bitcoin [BTC] Whale has opened one of the largest short positions seen in months.
Data in chain Arkham Intelligence revealed that the trader deposited $80 million worth of USDC into Hyperliquid, using over 5x leverage to sell Bitcoin for a total exposure of $420 million.
The whale also transferred $50 million to Binance, hinting at a similar short position there.
Needless to say, the timing has set off alarm bells. Especially since at press time, Bitcoin appeared to be trading around $121,000 after a week of volatile gains and steady ETF inflows. According to Arkham, the whale’s move indicates a high-risk bet against the market, a “massive dump” in the making if price momentum weakens.
Derivatives data paints a mixed picture
Despite the whale’s aggressive positioning, it can be argued that traders remain cautiously optimistic.
According glass coinBitcoin’s OI-weighted funding rate stood at 0.0043% on October 9, which is still positive – a sign that longs continue to dominate the market. Meanwhile, total long liquidations reached $121 million in 24 hours, compared to $63 million for short liquidations.
Source: Coinglass
This suggests that while some long leverage positions are being eliminated, broader sentiment has not turned decisively bearish.
ETF inflows continue to offset bearish bets
Even with the whale’s short position, institutional demand has been consistently strong lately.
In fact, the data of ValueBear revealed that Bitcoin spot ETFs recorded eight consecutive days of inflows. These inflows have helped stabilize market sentiment, despite occasional spikes in volatility.
If funding rates turn negative or short liquidations increase, that could confirm a change in sentiment. For now, however, the market could be interpreting the whale bet as a tactical play, rather than the start of a major decline.
Price outlook: signs of exhaustion, but structure intact
At the time of publishing, Bitcoin’s daily chart highlighted the price struggling to stay above the $121,000 level after multiple rejections near $123,000. The last candle recorded a 1.9% drop, suggesting slight selling pressure after a week-long rally.
Source: TradingView
The Relative Strength Index [RSI] stood at around 58, indicating cooling momentum without yet entering oversold territory.
Meanwhile, the recent breakdown of the structure [BOS] and character change [ChoCH] Signs indicated that BTC remains in a longer-term uptrend. However, short-term volatility could persist if the whale shortage sparks broader fears.
Immediate support was near $118,000, followed by stronger demand around $112,000. On the upside, BTC must reclaim $123,500 to confirm fresh momentum towards $126,000-$128,000.
Overall, while the structure remains intact, the momentum has weakened. This could give more weight to short-term bearish bets, such as the aforementioned whale position.
