High Risk, High-Reward? Trader Ups Ethereum Short Before Crypto's Pullback, Records Unrealized Profit Of $1.8 Million

A leveraged trader who doubled down on their Ethereum ETH/USD short bet on Wednesday was sitting on unrealized profits as the second-largest cryptocurrency fell in value.

What Happened: According to on-chain tracker Lookonchain, the trader deposited an additional $3.37 million in USD Coin USDC/USD to increase their short on Ethereum. As of this writing, the position stands at 40,000 ETH, equivalent to $109.9 million.

The trader opened a 15x leveraged short position on ETH on the decentralized perpetual trading platform Hyperliquid at an entry price of $2,793.81.

The trader has an unrealized profit of $1.80 million at the time of writing. The entire position would be liquidated if ETH rallies to $2,938.2

The trader seems to enjoy leveraged trading, having previously made a profit of $5.18 million in just two weeks by going long on ETH. He exited the position and flipped short right before prices dropped last week.

Why It Matters: These moves come after ETH’s rally, which began earlier this week, was cut short on Wednesday. The cryptocurrency took a U-turn after cruising to $2,877.63 in the early hours.

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Interestingly, nearly 60% of Binance traders with open ETH positions were positioned long, suggesting that they anticipated a price increase.

Additionally, the balance held by long-term holders of ETH rose in the last 24 hours, according to IntoTheBlock, indicating that accumulation was going on.

Price Action: At the time of writing, Ethereum was exchanging hands at $2,746.34, down 12.81% in the last 24 hours, according to data from Benzinga Pro.

Benzinga Note: Leverage trading allows cryptocurrency traders to open larger positions using borrowed capital. While it can potentially amplify profits, it also significantly increases the risk of substantial losses due to the volatile nature of cryptocurrencies.

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