Ethereum News Today: AguilaTrades Suffers $696K Loss on 25x Leveraged 10,000 ETH Short

AguilaTrades, a prominent trader on Hyperliquid, nearly closed a 25x leveraged short position on Ethereum (ETH) in early August, resulting in a reported loss of $696,000 over a 24-hour period [1]. The trade involved a substantial 10,000 ETH position, valued at approximately $42 million, and was executed via a Time-Weighted Average Price (TWAP) order over a three-hour window [3]. The move marked a shift in the trader’s strategy, transitioning from long positions in both Bitcoin and ETH—where he previously realized a $11.3 million profit—to a highly leveraged bearish stance on ETH [3].

The short position was initiated just 20 minutes prior to the report, with the trader selling around 3,333 ETH per hour, or 55.6 ETH per minute, at the outset [3]. Given the 25x leverage, even small price movements in ETH could trigger significant losses, as evidenced by the $696,000 loss. The initial margin for the position was estimated at around $1.68 million, highlighting the high capital exposure associated with such leveraged trades [3].

This move came amid broader bearish positioning by AguilaTrades, including a 20,000 ETH short at 25x leverage in late July, which carried a notional value of $83.74 million [2]. The cumulative bearish strategy reflects a trader adapting to rapid and unpredictable market conditions, leveraging high-multipliers to amplify potential returns, albeit with increased risk of liquidation.

The execution of the TWAP order, designed to minimize slippage and market impact, drew attention from traders monitoring ETH’s perpetual funding rates, spot-derivatives basis, and liquidation clusters [3]. Such large leveraged trades can influence short-term liquidity and price action, potentially contributing to volatility spikes. On-chain analysts noted that similar high-leverage shorts have historically driven ETH trading volumes above $10 billion in a single 24-hour period [3].

The incident underscores the growing trend of institutional-style trading in crypto markets, where large players use advanced order types and high leverage to shape market sentiment and liquidity. This is particularly relevant for ETH, where large leveraged positions can drive both short-term volatility and longer-term directional shifts [1][3].

The loss incurred by AguilaTrades highlights the inherent risks of high-leverage trading in a volatile asset class. Even with sophisticated execution strategies like TWAP, leveraged positions remain vulnerable to rapid price swings. As the market continues to evolve, the actions of influential traders will remain a key factor in shaping liquidity, volatility, and overall market sentiment [3].

Market participants are now awaiting further disclosures from AguilaTrades, including potential regulatory responses or platform-level actions to manage such high-risk trades [3]. Observers also expect continued scrutiny of leveraged trading practices, with a focus on mitigating systemic risks in crypto markets [3].

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Source:

[1] Ethereum News Today: Hyperliquid Whale Suffers $696K Loss in 24 Hours on 25x Leveraged ETH Short

https://www.ainvest.com/news/ethereum-news-today-hyperliquid-whale-suffers-696k-loss-24-hours-25x-leveraged-eth-short-2508/

[2] AguilaTrades Adds 20,000 ETH 25x Short at USD 4,193 Entry

https://blockchain.news/flashnews/aguilatrades-adds-20-000-eth-25x-short-at-usd-4-193-entry-usd-83-74m-position-highlights-bearish-leverage

[3] ETH Short Alert: AguilaTrades Starts 25x TWAP Sell of 10,000 ETH ($42M) After $11.3M Profit

https://blockchain.news/flashnews/eth-short-alert-aguilatrades-starts-25x-twap-sell-of-10-000-eth-42m-after-11-3m-profit-what-traders-should-monitor