Crypto traders are using Hyperliquid blockchain’s transparency to target whales with highly leveraged positions. According to 10x Research head Markus Thielen, the platform’s on-chain visibility is enabling smaller traders to track whale positions and deliberately trigger their liquidations.
Hyperliquid, a trading-focused blockchain, publicly reveals the size, type, and liquidation thresholds of whale trades—especially those using leverage. This also allows market participants to strategically time their trades in hopes of pushing prices toward the whales’ stop levels.
“This transparency opens the door for coordinated efforts, where groups of traders could intentionally target these stop levels to trigger liquidations,” Thielen explained in a March 17 report. He believes this trend could signal a shift in market power, allowing retail traders to deploy tactics previously reserved for market-making desks or treasury teams at exchanges.
Echoes of the GameStop Short Squeeze
The recent whale liquidation attempts bear a striking resemblance to the GameStop short squeeze of 2021, where retail traders collectively drove the stock’s price to all-time highs, forcing institutional short-sellers to cover their positions at massive losses.
“This reminds me of the dynamics we saw during the GameStop saga,” Thielen said. “When stop levels get triggered, prices often accelerate in that direction, providing liquidity for others to cover.”
On March 16, a crypto whale on Hyperliquid placed a 40x leveraged short position on Bitcoin at $84,043, betting against the market with 4,442 BTC, worth over $368 million at the time. The whale afterward faced liquidation if Bitcoin’s price surpassed $85,592.
Sensing an opportunity, a pseudonymous trader named CBB took to X, calling on fellow traders to pool their funds and deliberately push Bitcoin’s price above the whale’s liquidation threshold.
On-Chain Transparency: A Double-Edged Sword
While blockchain transparency is often praised for promoting accountability, it also exposes large positions, making whales vulnerable to targeted liquidations. Thielen noted that while it’s unclear if this coordinated stop-hunting will become widespread, the Hyperliquid incident highlights how on-chain visibility can be used as both a tool and a weapon.
As crypto markets grow more transparent and collaborative, whales may risk becoming targets of this new wave of retail-led liquidations.
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