Trading firms maintain short positions on Bitcoin, Ethereum amid price rally

Three institutional trading firms are collectively betting more than half a billion dollars against Bitcoin and Ethereum on Hyperliquid, even as the broader crypto market rips higher and liquidates shorts left and right.

Abraxas Capital, Fasanara Capital, and Wintermute hold combined short positions of approximately 3,425 BTC (worth roughly $265M) and 138,569 ETH (valued at around $338M) on the decentralized perpetuals exchange. That’s about $603M in total short exposure, with unrealized losses hitting approximately $75M as of August 24, according to on-chain data tracked by Lookonchain.

Swimming against a $4B liquidation tide

Between August 19 and 22, Bitcoin surged past $70,000 and touched intraday highs near $77,000. The rally wasn’t gentle about punishing the short side of the trade: over $4B in crypto short liquidations rippled across the market during that stretch.

The trio’s bearish stance isn’t new territory, either. Back in July, Abraxas and Fasanara’s combined ETH shorts were reported at around $108M. They’ve since scaled up considerably, suggesting this isn’t a hedge that quietly grew out of control but rather a deliberate, expanding directional bet.

Wintermute, widely recognized as one of crypto’s largest market makers, adds a wrinkle to the narrative. Market makers frequently hold short positions as part of delta-neutral strategies, meaning their shorts might not represent a purely directional bearish view. They could be hedging spot holdings or managing inventory across venues.

Why short into strength?

First, these positions may function as hedges against larger long exposure held elsewhere. A firm that’s long spot BTC or ETH might short perpetuals on Hyperliquid to lock in basis or reduce net exposure without selling underlying assets.

Second, the firms might genuinely believe the rally is overextended. Bitcoin’s move to $77,000 intraday was fast and largely driven by macroeconomic tailwinds, including US Treasury-related liquidity dynamics and increasing regulatory clarity.

Third, leverage matters. Short positions on perpetuals platforms are often leveraged, sometimes up to 10x. That means the notional exposure figures, while impressive, might represent a fraction of the actual capital at risk. A $603M short at 5x leverage, for example, would require only about $120M in margin.

The $75M in unrealized losses is real, though. At some point, that number either reverses as prices pull back, or it grows large enough that the positions get liquidated or voluntarily closed.

What the tug-of-war means for the market

With $603M in combined exposure concentrated among three identifiable players on a transparent, on-chain venue, the market can effectively watch the pain build in real time. Other traders can see their positions and may attempt to push prices into their liquidation levels, a strategy sometimes called “hunting” that’s common on perp platforms.

The broader read is that institutional sentiment is far from unanimous. While the $4B in liquidated shorts suggests most leveraged bears got washed out, the survival and expansion of these particular positions tells a different story.

The fact that these positions live on Hyperliquid, a decentralized platform where everything is visible on chain, means the market won’t have to guess when that moment arrives. Everyone will see it happen in real time.