According to the 10x head of the study, tracing crypto whales on high lipid blockchains allowed traders to target whales in prominent leverage positions in attempts to “democratize.”
High lipids, a trading-specific blockchain network, allow traders to publicly observe the types of positions held by whales, and as these positions are utilized, the market can assess the liquidation level without adding additional margins, Marcustieren said in a March 17 report.
Source: 10x Research
“This transparency opens the door to coordinated efforts so that a group of traders can intentionally target these stop levels and trigger liquidation,” he said.
A common belief in the crypto market is the general belief that a heavily held whales can influence the market through trading tactics such as stop loss hunting, intentionally inducing stop loss orders for other traders and liquidating positions.
Thielen says recent actions from traders indicate this balance of power could change.
“In effect, stophunting has been ‘democratized’ and ad hoc groups play a role primarily for market production desks and the Treasury teams before scrutiny of more strict regulations,” Tyren added.
“It remains to be seen whether this type of activity will be on-chain across a wide range of areas, but as usual, transparency could be reduced in both ways.”
Why are traders trying to settle whales?
This is not the first time a small trader has attempted to remove a large entity through a coordinated trading tactic.
Tyren says that crypto traders trying to settle whales have a shorter echo of game stops. This makes small traders turn the tables of Wall Street short-sellers by buying GameStop stocks, sending them to an all-time high of $81, liquefiing their positions.
“This reminds me of the dynamics I saw at Gamestop Saga in 2020/2021.
Related: “Brutal” $4 million high lipid loss bibit CEO: Low leverage as position grows
“When a stop level is triggered, prices often accelerate in that direction, and others have seen similar tactics from market makers and exchanges over the years.”
Hunt is still on with a short seller of 40x leveraged bitcoin
On March 16, Crypto Whale, known for placing large and highly leveraged positions on high lipids, opened a 40x leveraged short position for $84,043 at 4,442 Bitcoin (BTC), over 4,442 Bitcoin (BTC), and faced liquidation if the price of Bitcoin exceeded $85,592.
This move was not overlooked, and the kana trader CBB sent an X call to gather a team of traders with enough funds to settle the whale’s position.
Source: CBB
In a 10x report, Tyren said Bitcoin had surged 2.5% within minutes on March 16th.
The Whale increased its position to $524 million, and at one point the Whale Hunter was pretty much hopeful when the Bitcoin price reached $84,583.84.
Source: CRG
However, some speculate that exposed short positions may be intentional.
Hedge fund trader Joshman said in a March 17 post that the whales may be intentionally trying to liquidate.
“So this is pretty rare and the self-clearing technique is not widely used, but this is a bit similar,” he said.
“In events like this, the seller is designed to actually make bombs and create a rally from his own shorts.
Source: Josh Man
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