Whale trader Loracle deposited and rapidly sold 616,675 Hyperliquid tokens worth $36.76 million, using the proceeds to defend a short position carrying over $103 million in notional exposure as the token trades near its all-time high.
Key Takeaways:
Loracle Offloads HYPE to Defend Massive Short as Squeeze Risk Mounts
Onchain data shows that Loracle, the trader holding the largest publicly tracked short on the Hyperliquid decentralized perpetuals exchange, deposited 616,675 HYPE tokens valued at $36.76 million into the platform, then sold the vast majority almost immediately.
The capital raised was used to add margin to a 1.8 million HYPE short position carrying over $103.7 million in notional exposure, buying Loracle additional time as the token continues to press toward new highs.
HYPE hit an all-time high near $63 on May 21 before pulling back slightly. Loracle’s estimated liquidation price sits at approximately $69.90, meaning the position would be forced closed if HYPE climbs roughly $12 from current levels, a gap that has been narrowing steadily as institutional buyers have entered the market.
Two major catalysts seem to have driven HYPE higher in recent weeks. The first includes the launch of Bitwise spot HYPE exchange-traded fund (ETF) on May 12, drawing $58.73 million in net inflows since debut, and giving regulated U.S. investors their first direct exposure to the token.
Secondly, onchain sleuths recently identified wallets linked to venture capital firm a16z as having accumulated over $90 million (in HYPE) since mid-April, positioning the firm as the sixth-largest holder and signaling strong institutional conviction in Hyperliquid’s trajectory.
$103.7M HYPE Short Nears Danger Zone as ETF Inflows Fuel Rally
Loracle’s short has been building for weeks as he originally held a large long position before flipping entirely to a short around April 20, 2026, a contrarian bet that HYPE would decline from elevated levels.
As the token has surged, the trade has moved significantly against him with each capital injection (like today’s $36.76 million sale), delaying but not eliminating the risk of liquidation. If HYPE reaches $69.90, the position closes automatically regardless of Loracle’s actions.
Bitcoin.com News has covered Hyperliquid’s volatility before, with the platform previously wiping out $36.5 million in short positions in a single session as HYPE climbed toward its prior all-time high. The current setup shares structural similarities, given concentrated short exposure, rising token price, and ETF-driven inflows creating sustained buy pressure that a single trader’s margin deposits may not be able to outrun indefinitely.