How Did a $24 Million Ether Loss Happen in 12 Seconds?
Why Was the Loss So Unusual?
Pension-usdt.eth had previously built a strong public trading record. The address had accumulated roughly $49 million in profits from bearish bitcoin and ether trades, including almost $6 million from a 60,000 ETH short closed in June and about $3.6 million from a 1,400 BTC short.Earlier in June, the trader had extended a winning streak beyond 20 trades while increasing an ether short to around $100 million in notional value. Thursday’s liquidation erased roughly half of the profits attributed to that run in a single position.The Hyperliquid account was effectively depleted, with the platform’s leaderboard showing a balance of only $35.61 and a 100% decline over the previous 30 days. That figure applies only to the trading account and does not indicate whether the associated blockchain address holds assets elsewhere.The episode shows why a strong historical record offers limited protection when leverage is involved. A trader can repeatedly make the correct directional call but still lose most or all of a leveraged position if one market move reaches the liquidation threshold.
Investor Takeaway
What Triggered the Crypto Short Squeeze?
The liquidation followed a sudden reversal across digital asset markets. Bitcoin had spent much of the previous period below $65,000, rewarding bearish positioning, before sentiment changed after the U.S. Treasury announced plans to expand purchases of longer-dated government securities under its bond buyback program.The Treasury action pushed longer-term yields lower and weakened the dollar, while risk assets rallied. The program is intended to improve liquidity in the Treasury market rather than operate as quantitative easing, but crypto traders responded quickly to expectations of easier financial conditions.Bitcoin climbed from around $64,000 toward $70,000, while ether gained roughly 18% over 24 hours and moved above $2,200.The rally hit a derivatives market carrying substantial bearish exposure. Around $2.74 billion of crypto short positions were liquidated over 24 hours, the largest wave of forced short closures in available data dating back to 2021. Ether shorts accounted for more than $1 billion.Pension-usdt.eth was not the largest individual loss. Another Hyperliquid trader lost a bitcoin position worth about $48.8 million during the same rally.
Can Forced Liquidations Keep the Rally Going?
The scale of the short squeeze helps explain why cryptocurrency prices moved so quickly. Not every purchase during the rally represented a new investor voluntarily entering the market. Some buying came from exchanges automatically closing short positions as prices crossed liquidation levels.That mechanical demand can accelerate a rally because every increase in price puts another group of leveraged bears at risk. Large positions can also worsen their own execution as forced purchases consume liquidity at progressively higher prices.But liquidation-driven buying is temporary. Once vulnerable short positions have been cleared, that source of demand disappears. Further gains then depend more heavily on fresh spot purchases and whether investors continue adding exposure after the squeeze has run its course.For pension-usdt.eth, the distinction is decisive. Crypto prices may fall again and the trader’s broader bearish thesis could eventually prove correct, but the liquidated position can no longer benefit. A trade that remained open for more than two months needed only 12 seconds of adverse price action to unwind.
