One of the largest and riskiest short positions on Ethereum (ETH) in recent memory is teetering on the edge of disaster.
The case highlights the risks of high-leverage bets, mirroring experiences known to traders like Andrew Tate and James Wynn.
Whale’s Bet Against Ethereum Digs Deeper: From $10.7 Million to $26 Million in Red
Lookonchain has been tracking whale address 0x8c58 for a while now. According to the blockchain analytics account, the large holder faces an unrealized loss exceeding $26 million on a massive 20× leveraged short against ETH.
According to Lookonchain’s latest update, the whale will be liquidated when ETH hits $5,002.3 unless more margin is added to his position on decentralized derivatives exchange Hyperliquid.
As of this writing, Ethereum was trading for $4,636, up by over 8% in the last 24 hours. This means whale address 0x8c58 is just over 7% away from liquidation.
The saga began on July 12, when 0x8c58 entered the short at roughly $2,969 per ETH. By July 18, barely a week afterwards, ETH’s price surge had left the position down over $10.7 million.
This compelled the whale to inject $3.58 million USDC to push the liquidation price to $4,006.2.
The losses mounted through August. On August 10, Lookonchain reported another $8.6 million USDC deposit, extending the liquidation level to $4,885.3.
However, Ethereum’s relentless climb has erased that cushion. As of today, the whale’s red ink stands at $26 million.
Allure of Textbook Leverage Traps
High-leverage trades on platforms like Hyperliquid have been making headlines for months. In a recent BeInCrypto report, other high-profile traders, including controversial influencer Andrew Tate and infamous whale James Wynn, have suffered spectacular losses using similar strategies.
Tate reportedly lost $583,000 after making over 76 trades with only a 35.5% win rate, capped off by a risky 25× leveraged long on ETH.
On the other hand, once sitting on $87 million in trading profits, James Wynn saw most of it wiped out by overleveraged positions, including a $100 million Bitcoin long and a meme coin bet gone wrong.
While 0x8c58’s short position is far larger than either’s, the pattern is familiar—aggressive leverage, volatile assets, and repeated margin injections that buy time but not relief.
Analysts warn that leverage above 10× raises the probability of liquidation by more than 40%, especially when market momentum is moving against the trader.
Financial technology company OneSafe revealed a March 2025 incident where a whale on Hyperliquid had a $200 million ETH position wiped out after margin maintenance fell short.
That trader used 50x leverage, indicating how fast things can spiral.
“High-leverage trading can be a double-edged sword…It offers a tantalizing opportunity for profit, but… can lead to some pretty devastating losses,” the OneSafe analysis noted.
Episodes like this highlight the transparency and the peril of decentralized exchanges (DEXs). Hyperliquid’s on-chain nature means every position, margin top-up, and loss is visible in real time. However, the same openness reveals how quickly even seasoned traders can spiral into catastrophic losses.
As institutional interest and ETF inflows drive ETH toward the $5,000 mark, it will be interesting to watch if whale 0x8c58 can escape liquidation. If not, they could become the latest wake-up call amid DeFi’s leverage risk trap.
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