A Bitcoin whale just shorted $420M – Massive BTC dump coming?

Key Takeaways

How did a Bitcoin whale short $420 million worth of BTC?

The whale deposited $80 million in USDC on Hyperliquid and used 5x leverage to open a $420 million short.

Does this signal a major Bitcoin dump?

Not yet. Funding rates remain positive at 0.0043%, showing traders still lean long.

A major Bitcoin [BTC] whale has opened one of the largest short positions seen in months.

On-chain data from Arkham Intelligence revealed that the trader deposited $80 million in USDC on Hyperliquid, using over 5x leverage to short Bitcoin for a total exposure of $420 million. 

The whale also transferred $50 million to Binance, hinting at a similar short position there.

Needless to say, the timing has raised alarms. Especially since at press time, Bitcoin seemed to be trading at around $121,000 following a week of volatile gains and consistent ETF inflows. According to Arkham, the whale’s move signals a high-stakes bet against the market, a “massive dump” in the making if price momentum weakens.

Derivatives data paints a mixed picture

Despite the whale’s aggressive positioning, it can be argued that traders remain cautiously optimistic.

According to Coinglass, Bitcoin’s OI-weighted funding rate stood at 0.0043% on 09 October, still positive – A sign that longs continue to dominate the market. Meanwhile, total long liquidations hit $121 million in 24 hours, compared to $63 million in short liquidations.

Source: Coinglass

This suggested that while some leverage longs are being flushed out, broader sentiment hasn’t turned decisively bearish.

ETF inflows continue to offset bearish bets

Even with the whale’s short position, institutional demand has been consistently firm lately. 

In fact, data from SosoValue revealed that Bitcoin Spot ETFs saw eight consecutive days of inflows. These inflows have helped stabilize market confidence, despite occasional volatility spikes.

If funding rates turn negative or short liquidations surge, that could confirm a shift in sentiment. However, for now, the market might be reading the whale’s bet as a tactical play, rather than the start of a major dump.

Price outlook – Signs of exhaustion, but structure intact

At press time, Bitcoin’s daily chart highlighted the price struggling to hold above the $121,000-level after multiple rejections near $123,000. The latest candle saw a 1.9% decline, hinting at mild selling pressure after a week-long rally.

Source: TradingView

The Relative Strength Index [RSI] stood at around 58, indicating cooling momentum without yet entering oversold territory.

Meanwhile, the recent Break of Structure [BOS] and Change of Character [ChoCH] signals indicated that BTC remains in a higher-timeframe uptrend. However, short-term volatility could persist if the whale short triggers broader fear.

Immediate support lay near $118,000, followed by stronger demand around $112,000. On the upside, BTC must reclaim $123,500 to confirm a renewed push towards $126,000–$128,000.

Overall, while the structure remains intact, the momentum has weakened. This could lend more weight to short-term bearish bets like the aforementioned whale’s position.