Short Squeeze Grips ASTER Market as Traders Lose $2M in Forced Buys

Hyperliquid’s largest ASTER short position has triggered significant market activity as traders grapple with the token’s rapid price surge. According to on-chain analyst @ai_9684xtpa, a major account closed 1.293 million ASTER tokens at a $390,000 loss amid last night’s rally, indicative of forced buy-side flows into the order bookHyperliquid’s Largest ASTER Short Closes 1.293M Tokens at $390K Loss, Rebuilds $5.11M Position at $1.05 Entry with $1.798M Unrealized Loss^[1]. The same entity subsequently rebuilt its exposure to a $5.11 million notional position, now holding 3.153 million ASTER tokens with an average entry price of $1.05 and an unrealized loss of $1.798 million^[2]. This move underscores the trader’s continued bearish conviction despite mounting losses, as ASTER’s price climbed to $1.62 at the time of reportingThe largest short position of ASTER on Hyperliquid has a floating^[3].

The broader market context reveals ASTER’s explosive growth, with the token surging 85.75% in 24 hours to $1.706 as of September 21ASTER Surges Above $1.7, Up Over 85% in 24 Hours^[6]. This follows a 1,650% surge in its first 24 hours post-launch, driven by a CZ-backed airdrop and institutional interestAster Token Explodes 1,650% in First 24 Hours, Platform TVL^[7]. The price rally has intensified pressure on short positions, with multiple large players adjusting their strategies. For instance, a separate whale increased its 3x leveraged ASTER short to $496,000 notional value, facing a $69,200 unrealized loss as the token traded above $1.45「Whale Friend」 Further Increases Short Position on ASTER^[9]. Another whale deposited 2.3 million USDC as margin to avoid liquidation, raising its liquidation price to $2.09Yesterday, the whale who shorted ASTER with 3x leverage added^[10].

The short squeeze dynamics highlight the volatile nature of perpetual futures trading. As ASTER’s price advances, short sellers face margin calls and forced closures, exacerbating buying pressure. On-chain data shows 24-hour trading volumes for ASTER pairs exceeding typical averages, with 50,000 unique addresses interacting in the last dayHyperliquid’s Largest ASTER Short Closes 1.293M Tokens at $390K Loss, Rebuilds $5.11M Position at $1.05 Entry with $1.798M Unrealized Loss^[1]. Technical indicators suggest the token is approaching overbought territory, though sustained momentum above $1.05 could attract further short covering. Conversely, a pullback below this level might validate the trader’s renewed bearish bet.

Institutional and whale activity further complicates the narrative. A whale/institution previously hedged its 7.5 million USDT ASTER purchase by shorting 6.486 million tokens on Hyperliquid, exploiting the platform’s 450% annualized funding fee rateThe whale/institution that purchased ASTER for 7.5 million USDT^[4]. Meanwhile, the largest ASTER short position on Hyperliquid (0x939...04d2) initially opened at $0.7791 with a $1.352 million floating lossA giant whale opened Hyperliquid's largest ASTER short position^[5]. These actions reflect a mix of speculative trading and arbitrage strategies, though the current environment has amplified risks for leveraged positions.

Market observers note that ASTER’s performance mirrors broader crypto trends, where short positions have been punished by bullish catalysts such as regulatory developments and ETF inflows. The token’s multi-chain infrastructure and CZ’s endorsement position it as a potential competitor to Hyperliquid, though its FDV of $13.3 billion contrasts sharply with the latter’s $55 billion valuationMarket Position Against Hyperliquid’s Dominance^[8]. Traders are advised to monitor cross-market correlations, as a BTC rally above $60,000 could further bolster altcoins like ASTERHyperliquid’s Largest ASTER Short Closes 1.293M Tokens at $390K Loss, Rebuilds $5.11M Position at $1.05 Entry with $1.798M Unrealized Loss^[1].