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CryptoIntelligence 2025-02-02 23:15:00

Crypto Trader Makes $16 Million Shorting Ethereum Amid Market Sell-Off

A cryptocurrency trader has realized a profit of nearly $16 million by capitalizing on Ether’s (ETH) recent price decline. The trader established a 50x leveraged short position when ETH was valued at $3,388, with a liquidation threshold set at $4,645, according to data from Hypurrscan. In addition to the unrealized profit, the trader accrued approximately $2.3 million in funding fees from the leveraged position. While leveraged trading can amplify potential gains, it also significantly increases the risk of substantial losses. A case in point is a pseudonymous trader who, in January 2024, lost over $161,000 in a single trade due to liquidation on a leveraged position, underscoring the inherent risks associated with such strategies. As of February 2, Ether’s price had declined by more than 4% over a 24-hour period, trading at $3,107. The cryptocurrency reached a daily low of $3,068 but managed to stay above the critical $3,000 psychological threshold, as reported by Cointelegraph Markets Pro. To reverse its six-week downward trend, Ethereum may need to bolster fundamental blockchain activity. Aurelie Barthere, principal research analyst at Nansen, noted, “Other layer-1s are catching up with Ethereum regarding apps, use cases, fees and amount staked.” Barthere suggested that increased collaboration with both private and public sector entities, especially in the United States amid recent regulatory developments favoring blockchain and cryptocurrency, could be beneficial for Ethereum. For a potential reversal toward the $4,000 mark, Ether would need to reclaim the $3,400 level, according to crypto trader Cas Abbé. However, significant resistance is anticipated at $3,240. Surpassing this level could trigger over $1 billion in cumulative leveraged short liquidations, as indicated by data from CoinGlass. These developments highlight the volatile nature of cryptocurrency markets and the substantial risks and rewards associated with leveraged trading strategies.

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