Due to the exit of large holders from leveraged positions, Ethereum market sentiment could be on the verge of a switch. Whale address 0x89Da has recently closed a sizable long position of 21,683 ETH, which is worth roughly $93 million, according to on-chain data.
Losses piling up
For one of the more active addresses in the derivatives space, the trade resulted in a significant hit with a realized loss of approximately $6.6 million. The same whale indicated a full withdrawal from Hyperliquid after the closure by withdrawing all 9.6 million USDC.
Due to Hyperliquid’s popularity as a venue for leveraged Ethereum trades, these withdrawals may have wider effects on sentiment and market liquidity. Following its recent surge, Ethereum has been consolidating below the $4,500 mark at the time of this development. Even though ETH is still trading close to annual highs, whale activity indicates that caution is increasing.
Derisking starts
In the past, leveraged derivatives positions tended to diminish as Ethereum got closer to possible cycle tops. To avoid increased risks large traders frequently cut back on exposure or take profits, particularly when funding costs for perpetual futures are still high. This pattern is consistent with whale 0x89Da’s exit.
The whale’s decision to close a sizable position and remove stablecoins, effectively conveys a decreased willingness to take on risk and a lack of optimism regarding the near-term gains. The derivatives market may experience a discernible decline in open interest if more major players follow, which would lessen the leverage that has driven a large portion of the recent rally.
