$11.87 million increase at the edge of liquidation: Why Hyperliquid's biggest short is taking riskier bets

Hyperliquid’s largest short address strikes again. This whale, known as the “Air Force Commander,” after just experiencing a $199 million liquidation, has turned around and increased its short positions in BTC and ETH worth $11.87 million. More notably, the address’s margin utilization has reached 106.5%, in a rollover state — meaning the account is operating in overdraft, and any further price fluctuations could trigger a chain of liquidations.

Aggressive Short Sellers

Position size and structure

This address currently holds a total short position of $276 million across five cryptocurrencies: BTC, ETH, HYPE, PEPE, and XMR. The core positions are concentrated in:

This position structure reveals a key insight: the whale has over 90% of its holdings concentrated in BTC and ETH, with liquidation prices for both relatively close to the current market prices. According to the latest news, BTC is currently around $92,000, which means the BTC short has less than a 0.3% safety margin.

The paradox of floating profits and risks

The account currently shows a floating profit of $5.62 million, suggesting it is profitable. But this figure masks a critical issue: a margin utilization of 106.5% indicates the account is already “borrowing” future profits to maintain its current positions. In other words, this is not real profit but a paper gain that could collapse at any moment.

Why increase positions after liquidation

In the early hours yesterday, this address experienced a $199 million liquidation after BTC surged 2.3% and ETH nearly 5%, with the largest single liquidation reaching $40.22 million. This was the biggest liquidation event in nearly 24 hours across the entire network.

Yet, just hours after the liquidation, the whale re-entered and continued to add to its positions today. This behavior suggests two possible reasons:

• Strong bearish conviction: The whale believes the current rebound is only a short-term fluctuation and expects further decline, so it continues to short.
• Forced operation: Due to the full-coverage margin mode, replenishing the position is to prevent complete liquidation, and increasing the short is a bet on a rebound followed by further decline.

Market impact assessment

This address’s actions have a significant impact on the Hyperliquid market. According to relevant information, because it uses a full-coverage margin mode, its position adjustments directly influence the liquidation prices of multiple coins. Yesterday’s liquidation event caused the liquidation prices of several tokens to drop significantly.

More importantly, this whale is the largest short holder of BTC, ETH, PEPE, XRP, and other tokens. If it faces another large-scale liquidation, it could trigger a chain reaction among these tokens — forced long positions could push prices higher, triggering more short liquidations.

In comparison, other major longs on the platform, such as the “BTC OG Insider Whale,” adopt a relatively conservative strategy. Although their floating profits have narrowed to $8.1 million, their margin utilization remains within a safe range. This creates a stark contrast.

Summary

The actions of this Hyperliquid’s largest short present a dangerous scenario: continuing to increase shorts with a margin utilization over 100%, essentially walking on the edge of a cliff.

From a market perspective, this reflects the whale’s strong bearish outlook for the future but also exposes the extreme fragility of its aggressive strategy. Any BTC price increase exceeding 0.3% or similar ETH fluctuations could trigger another round of liquidation. Once liquidation occurs, it could escalate into a market-wide chain reaction.

For Hyperliquid and other traders, closely monitoring this address’s subsequent moves is crucial — it not only represents a whale’s gamble but could also become the trigger for the next market volatility.