While the market celebrates the historic weekly growth of the first cryptocurrency, one of the largest market makers is taking the opposite side. On August 23, Wintermute increased its short positions on the decentralized exchange Hyperliquid from $146.19 million to $190.77 million. An increase of roughly $44.58 million in a short period of time is not just hedging, but deliberate bearish positioning.
The distribution of shorts shows exactly where the negative sentiment is directed. The largest bet was placed on Ethereum — $53.02 million. Bitcoin took second place with $30.66 million. Next come Solana ($22.62 million), Hyperliquid's native token HYPE ($11.43 million), and XRP ($10.19 million). This selection of assets suggests that Wintermute expects a correction not only in altcoins, but also in the market's flagship assets themselves.
Institutional consensus or temporary imbalance?
Lookonchain's analysis confirms that Wintermute is not alone in this. After the recent rally that knocked many retail short sellers off the field, institutional hedge accounts have taken the stage. Abraxas Capital, Fasanara Capital, and Wintermute collectively hold shorts on 138,569 ETH (~$338 million) and 3,425 BTC (~$265 million). The total amount of liabilities reaches $603 million.
Notably, it is these three companies that survived the wave of liquidations that wiped out positions of smaller players. However, their resilience comes at a price. The largest unrealized loss is recorded at Abraxas — about $58 million across four positions in BTC and ETH. Fasanara is down $16.6 million. Wintermute's figures for the two leading cryptocurrencies are currently balancing around zero.
The key point is the liquidation levels. For Abraxas's Ethereum positions, they are $4,008 and $3,958; for Bitcoin — $128,521 and $140,437. For Wintermute, the critical mark for digital gold is at $251,307. These figures are far from current quotes: Bitcoin is trading around $78,100, Ethereum is in the region of $2,500.
It is worth noting that from August 17 to 23, Bitcoin rose by $14,264, which became a record weekly gain in history. Against this backdrop, Wintermute's actions look like a high-risk counter-trend play.
My view: Such behavior by market makers is often not so much a forecast as a volatility management strategy. Nevertheless, the concentration of shorts at levels significantly exceeding current prices creates potential for a strong short squeeze if the rally continues. The market has now priced in a high cost for confidence in a correction — and either it will happen, or these positions will become fuel for the next surge.