Ethereum Long-Short Battle Escalates: $63 Million Short vs. $1.1 Billion Liquidation Risk

According to the latest news, a massive Ethereum whale has invested $63 million to establish a 3x leveraged short position on Hyperliquid exchange, betting that ETH will face resistance in the critical $3200-$3400 zone. This move has sparked strong reactions in the market, as it not only represents an aggressive trading strategy but also reflects the current high level of disagreement on Ethereum’s short-term direction. Currently, ETH is trading near $3223.71, up 1.92% in the past 24 hours, with a 7-day increase of 9.52%. The market is at a critical juncture with bulls and bears in opposition.

The Whale’s High-Risk Bet

Liquidation Risks Under Extreme Leverage

This short position is highly aggressive. The whale opened a 3x leveraged short at an average entry price of $3136, meaning that if ETH effectively breaks above $3400 and continues upward, the potential liquidation price could be close to $4545. From the current price of $3223 to the liquidation level at $4545, ETH only needs to rise about 41% to trigger full liquidation of this short, exposing significant risk.

Such high-leverage strategies are typically only employed when traders have strong conviction about the price direction. The whale has made approximately $1 million profit through swing trading on Hyperliquid over the past 30 days, indicating an experienced trader. Its total lending on AAVE has reached $26.71 million, demonstrating substantial capital and market influence.

Why Now

The whale chose to establish this short at this moment, believing that Ethereum will struggle to hold higher price levels in the short term. From a technical perspective, ETH’s Relative Strength Index (RSI) has risen above 70, indicating an overbought condition; MACD momentum is also waning, reinforcing market concerns about a weakening upward move. These indicators suggest that a short-term rebound may be nearing its end.

Bull-Bear Clash at Key Levels

$3200-$3400: The Decisive Zone

The $3200-$3400 range has become a recognized battleground for bulls and bears. If ETH effectively breaks above $3400, bears will face pressure; conversely, if it falls back to the $3000 support level, the market may face a new directional decision.

Precise Data on Two-Way Liquidation Risks

According to Coinglass data, liquidation risks show a clear asymmetry:

This indicates that the downward liquidation pressure is greater ($1.122B vs. $794M), but once triggered, the acceleration of the decline could be stronger. In environments with dense high-leverage positions, price volatility tends to be amplified quickly, leading to chain reactions of liquidations.

The Critical Support at $3000

Liquidity heatmaps show significant capital concentration around the $3000 level. This zone not only provides technical support but also acts as a psychological barrier. If resistance above fails to break through, the price is more likely to retest the $3000 area.

Contradictions in Market Signals

Institutional Accumulation vs. Whale Shorting

An interesting contradiction is emerging. On one hand, institutional funds continue to accumulate. Recent data shows that 7 siblings hold 252,000 ETH, worth over $8 billion, making them the fifth-largest institutional holder, even surpassing the Ethereum Foundation. Since October 2024, they have been building positions at an average price of $3479, totaling 48,588.72 ETH. On the other hand, whales are shorting. This reflects vastly different outlooks on Ethereum’s short- and medium-term prospects.

Implications of Exchange Net Outflows

In the past 24 hours, major exchanges have seen a net outflow of 4056.15 ETH, with Coinbase Pro outflows of 5827.95 ETH and Binance outflows of 2716.56 ETH. This suggests a recovery in withdrawal sentiment, with investors moving ETH out of exchanges for long-term holding or DeFi participation. Such behavior is typically associated with bullish sentiment, contrasting sharply with the whale’s short strategy.

Subtle Shifts in Market Sentiment

Entering the first week of 2026, the overall crypto market has shifted from “panic” to “cautious optimism.” Bitcoin has regained the $90,000 level, and market structure has become more institution-led. This optimistic sentiment poses a risk to the bears—if market sentiment continues upward, short positions will face increased pressure.

Summary

This $63 million Ethereum short is more than just a price bet; it is a microcosm of the market’s bullish-bearish divergence. Four key points to watch: First, the $3200-$3400 zone is indeed a critical threshold; whether it can be broken will determine the next trend. Second, both sides face high liquidation risks ($794M vs. $1.122B), meaning triggering either could spark chain reactions. Third, the ongoing accumulation by institutions versus the whale’s shorting reflects differing medium-term outlooks. Lastly, the $3000 support level is crucial—losing it could trigger a larger decline.

For investors watching Ethereum, the key will be whether ETH can hold above $3300. If it does, the probability of a bullish outcome increases; if not, the bearish case may be validated. In any case, this level will be a pivotal point for Ethereum’s trajectory in early 2026.