Twelve seconds erased half a top Hyperliquid short seller's year

A Hyperliquid wallet known as pension-usdt.eth spent two months building one of the year's better short-selling records, roughly $49 million in profit, then gave back nearly half of it in 12 seconds, CoinDesk reported. The forced liquidation of a 50,000 ETH short hit as ether surged Thursday morning, part of a market-wide squeeze that liquidated a record $2.74 billion in crypto shorts over 24 hours, the largest wave of forced short closures since record-keeping began in 2021.

The wallet had held the ether short for 1,445 hours, a little over two months, betting against a market that spent that stretch trading below $65,000. That trade broke apart across five forced sales between 04:51:03 and 04:51:15 UTC. The exchange sold 9,989 ETH at $2,193, then 20,698 ETH at $2,209, then 15,830 ETH at $2,214, then 1,871 ETH at $2,236. No buyer stepped up for the final 1,417 ETH, so Hyperliquid's insurance fund absorbed it. Ether climbed $43 in those 12 seconds, and the trader's own forced buying helped drive part of that move, making each successive chunk of the short more expensive to close than the one before it.

• ETH short position size: 50,000 ETH, held for 1,445 hours
• Loss on the forced liquidation: nearly $24 million
• Prior lifetime profit from short selling: roughly $49 million
• Ether price move during the 12-second liquidation: up $43
• Market-wide short liquidations in 24 hours: $2.74 billion, a record since 2021

The wallet trades under the display name "Pension Fund" on Hyperliquid's leaderboard, and its track record before Thursday was strong: about $6 million on a 60,000 ETH short closed in June, $3.6 million on a 1,400 BTC short the same month, $1.7 million on another bitcoin short back in March. Its account now holds $35.61, down 100% over the past 30 days against $111.76 million in trading volume in that window. The trigger behind the squeeze was the same one that sent bitcoin above $68,000 a day earlier: the US Treasury's bond buyback announcement, which eased financial conditions broadly and helped push both bitcoin toward $70,000 and ether up 18% in 24 hours. The pension-usdt.eth wallet wasn't Thursday's biggest casualty either. A separate $48.8 million bitcoin position, also on Hyperliquid, took the largest single hit of the day.

The mechanics behind the loss are what make it worth studying beyond the headline number. A short position gets liquidated because its collateral can no longer cover potential losses at current prices, and an exchange closes it by buying back the asset on the open market. When a position is large enough relative to available liquidity, that buying itself pushes the price up, which can trigger the next liquidation threshold and force another chunk of the same position closed at an even worse price. That's what happened across the five sales in this case: each one moved ether further from where the trader wanted to exit, and the last 1,417 ETH found no buyer at all, leaving Hyperliquid's own reserve fund to absorb it rather than the open market.

None of this should be read as personalized investment advice.