A significant cryptocurrency investor who emerged two months ago with approximately $11 billion in Bitcoin has initiated nearly $900 million in short positions against Bitcoin and Ether, indicating expectations of a market correction amidst broad optimism for October.
The whale resumed trading yesterday with a $360 million Bitcoin (BTC) transfer that caught the attention of cryptocurrency investors, Cointelegraph reported on Thursday.
On Friday, the whale established a $600 million 8x leveraged short position on Bitcoin and a leveraged short exceeding $300 million on Ether (ETH), as reported by blockchain data platform Onchain Lens.
The substantial short bets indicate the whale’s belief in an imminent market correction, but this perspective could be refuted if Bitcoin’s price surpasses $133,760, which is their liquidation threshold.
The whale also established a $330 million 12-times leveraged short position on Ether, with a liquidation price of $4,613. This position showed an unrealized profit of $2.6 million at the time of writing, according to blockchain data shared by Lookonchain on Friday.
The whale’s short positions may encourage other large investors to join in and bet on a decline in the market prices of leading cryptocurrencies.
In August, nine whale addresses accumulated a total of $456 million in Ether after the $11 billion Bitcoin whale shifted $5 billion of his Bitcoin into ETH.
High-volume selling from previously inactive Bitcoin whales was one of the primary reasons restricting Bitcoin’s price activity in August, according to analyst and early Bitcoin adopter Willy Woo.
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Bitcoin correction driven by smaller investors, not whales
Bitcoin hit a new all-time high above $125,700 on Sunday before retracting to trade over $121,350 at the time of writing, according to Cointelegraph data.
The bulk of the selling pressure originated not from large investors but from smaller wallet categories, including 603 Bitcoin sold by shrimp addresses, 2,260 Bitcoin sold by crabs, and 3,860 BTC sold by fish addresses, based on blockchain insights from CryptoQuant’s Thursday X post.
The shrimp category refers to retail investor addresses holding less than 1 Bitcoin. Crab addresses consist of holdings up to 10 Bitcoin, while fish addresses range between 50 to 100 BTC.
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Many cryptocurrency traders are also gearing up for a short-term downturn in the crypto market.
Currently, over 52% of Bitcoin holders across all exchanges are short, indicating they are betting on Bitcoin’s price decline, while only 47% remain long, according to blockchain data from CoinAnk.
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