Whale Makes Bold $HYPE Short Bet as HyperLiquid Fund Quietly Accumulates Millions

A major action has grabbed the attention of analysts and traders on the blockchain, as a gigantic crypto whale took a bold stand against $HYPE, the native token of the swiftly blossoming HyperLiquid ecosystem.

Appearing to make a not-so-invisible move, the whale took 812,665 USDC—about $813,000—from Binance three hours ago and quickly bridged the stablecoin to the HyperLiquid network. We know all of this not from inside information, but rather from the fact that all of these blockchain actions are public.

Not long after, the whale placed an aggressive short order on $HYPE, targeting a notional value of approximately $3.05 million. On-chain data reveals that this was not a single, sweeping transaction. Instead, the whale placed multiple short orders, in a not-so-subtle way, around the $19.45 to $21.20 range. What this seems to suggest is that the whale is either expecting some nasty downward volatility to kick off or is anticipating a pretty good price correction after recent market movements.

This activity is especially interesting when considering the current actions of the HyperLiquid Assistance Fund—a major supporter of the $HYPE token and the ecosystem surrounding it. The fund has, since February, been buying back and buying back large amounts of $HYPE, almost as if it is trying to absorb some of the sell pressure and steadily build its reserves.

As February rolled in, the HyperLiquid Assistance Fund was sitting on a stout 14 million $HYPE. Fast-forward to the present day, and we have a staggering 21 million tokens. In other words, somewhere between February and now, the fund added 7 million $HYPE to its reserves. I would be lying if I said the figure didn’t surprise me. Six months ago, I didn’t think the fund could ever reach 21 million tokens, if only because a 14 million figure seemed like such a solid cap.

What’s more impressive is the speed and uniformity of these repurchases. An examination of everyday on-chain activity reveals that the fund has been operating on about 75% of days since the beginning of February, with the majority of days entailing token acquisitions in the seven-figure range. Not even the lazy days dipped below six-figure purchase volumes, which presses on in demonstrating that the fund’s operations should be construed as consistent support for the price stability and long-term liquidity of the Acala token.

This tactic differs from the whale’s abrupt and colossal short position, which might signal a contrarian viewpoint or constitute a larger hedge against other assets. Whether this whale makes a market move because it’s privy to insider information or just thinks prices are about to drop isn’t clear. What is evident is that this whale’s perspective has market participants asking questions.

Market watchers are now trained closely on the HyperLiquid Assistance Fund to see how it will react to the current bearish pressure. Will it step up the buyback program and battle the whale’s short with even more accumulation? Or could we see the market enter a kind of reverse tug-of-war between the fund, trying to push the price up with direct accumulation, and outside forces with no apparent love for the price of hyperliquid, attempting to push it down?

This short’s timing also brings up the overarching market dynamics that are in play. $HYPE has maintained a solid uptrend over the last few months, in no small part due to its steady moves into the DeFi space and the loyal following that the token seems to have. But as tokens prices rise, that also means incentives for larger players to use the token as a short and test just how strong the market is—and how strong its sentiment is.

The presence of a big fund actively defending the token’s floor could, in theory, limit the downside for short sellers and make this a high-risk trade. On the flip side, if the whale is right and $HYPE faces a pullback, it could pressure the fund into accelerating its buying, leading to further volatility.

For the time being, the market is on edge. Both retail and institutional investors are examining every movement, every order book update, and every transaction involving a wallet. In a decentralized finance space as fast-moving and sentiment-driven as this one, a bet of this size could very well be a masterstroke—or a costly miscalculation.

Either way, the fight concerning $HYPE has started, and the upcoming few days might show which faction—bull or bear—dominates.

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Follow us on Twitter @themerklehash to stay updated with the latest Crypto, NFT, AI, Cybersecurity, and Metaverse news!

The post Whale Makes Bold $HYPE Short Bet as HyperLiquid Fund Quietly Accumulates Millions appeared first on The Merkle News.