A prominent cryptocurrency investor, who emerged two months ago with around $11 billion in Bitcoin, has initiated nearly $900 million in short positions against Bitcoin and Ether, indicating expectations for a market correction despite widespread optimism for October.
The whale resumed trading on Thursday with a $360 million Bitcoin (BTC) transfer that caught the attention of cryptocurrency investors, as reported by Cointelegraph.
On Friday, the whale established a $600 million 8x leveraged short position on Bitcoin and a leveraged short exceeding $300 million on Ether (ETH), according to blockchain data platform Onchain Lens.
These substantial short positions reflect the whale’s confidence in an impending correction, but this outlook could be invalidated if Bitcoin’s price exceeds $133,760, their liquidation threshold.
The whale has also opened a $330 million 12-times leveraged short position on Ether, with a liquidation price of $4,613. This position reported an unrealized profit of $2.6 million at the time of writing, according to blockchain data shared by Lookonchain on Friday.
The whale’s shorts may encourage additional large investors to make similar bets on the decline of leading cryptocurrencies.
In August, nine whale addresses accumulated a total of $456 million in Ether, after the $11 billion Bitcoin whale converted $5 billion of his Bitcoin into ETH.
Significant selling from previously dormant Bitcoin whales was cited as a primary factor constraining Bitcoin’s price performance in August, according to analyst and early Bitcoin adopter Willy Woo.
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Bitcoin correction caused by smaller cohorts, not whales
Bitcoin reached a new all-time high above $125,700 on Sunday, before dropping to trade above $121,350 at the time of writing, as per Cointelegraph data.
Most of the selling pressure originated from smaller investors rather than large ones, with smaller wallet cohorts selling 603 Bitcoin from shrimp addresses, 2,260 Bitcoin from crabs, and 3,860 BTC from fish addresses, according to blockchain insights platform CryptoQuant’s Thursday X post.
The shrimp cohort consists of retail investor addresses holding less than 1 Bitcoin, while crab addresses hold up to 10 Bitcoin and fish addresses maintain between 50 to 100 BTC.
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Many cryptocurrency traders are also anticipating a short-term downturn in the crypto market.
Over 52% of Bitcoin holders across exchanges are currently shorting, indicating a bet on Bitcoin’s price dropping, while 47% remain long, according to blockchain data from CoinAnk.
About 51% of Ether traders have also shorted the second-largest cryptocurrency, anticipating a downward trend.
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