Source: 10x Research“This transparency opens the door for coordinated efforts, where groups of traders could intentionally target these stop levels to trigger liquidations,” he said. It’s a common belief in the crypto market that whales with substantial holdings can influence the market through their trading tactics, such as stop-loss hunting, to deliberately trigger other traders’ stop-loss orders and liquidate their positions. Thielen says the recent actions from traders show this balance of power could be shifting.“In effect, stop-hunting is being ‘democratized,’ with ad-hoc groups now playing a role once reserved mainly for market-making desks, or treasury teams, at exchanges before tighter regulatory scrutiny,” Thielen added. Thielen told Cointelegraph that it’s still “unclear if this type of activity will become widespread onchain, but as always, transparency can cut both ways.” Why are traders trying to liquidate whales?
This isn’t the first time smaller traders have attempted to take down larger entities through coordinated trading tactics. Thielen says crypto traders trying to liquidate whales have echoes of the GameStop short squeeze, which saw small traders flip the table on Wall Street short-sellers by buying GameStop’s stock, sending it to all-time highs of over $81 to liquid their positions. “This reminds me of the dynamics we saw during the GameStop saga in 2020/2021, where aggressive short squeezes drove rapid price spikes,” he said. Related: Bybit CEO on ‘brutal’ $4M Hyperliquid loss: Lower leverage as positions grow“When stop levels get triggered, prices often accelerate in that direction, providing liquidity for others to cover.
We’ve seen similar tactics from market makers and exchanges in the crypto space over the years.” Hunt is still on for 40x leveraged Bitcoin short-sellerOn March 16, a crypto whale known for placing large, highly leveraged positions on Hyperliquid opened a 40x leveraged short position at $84,043 for over 4,442 Bitcoin (BTC), worth over $368 million on March 16, facing liquidation if Bitcoin’s price surpassed $85,592.
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Author / Journalist: Cointelegraph by Stephen Katte
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