A trader on the decentralized derivatives exchange HyperLiquid has seen a dramatic reversal in fortunes, turning what was once a $10 million unrealized profit into a $2.5 million loss. The plunge comes amid a 4% drop in bitcoin (BTC), echoing a similar wipeout suffered by a user known as James Wynn, who reportedly lost a $100 million position in May.
The trader, known on social platform X as AguilaTrades, had entered a long position on bitcoin at $106,000. As BTC surged to a high of $108,800, the trade was in deep profit before the tide turned. Bitcoin has since declined to around $104,000, erasing gains and flipping the position into a loss.
Leverage meets low volatility
Despite relatively muted volatility in recent months, with BTC largely rangebound between $100,000 and its all-time highs near $110,000, leveraged traders have continued to bet heavily on upside moves often at their peril. Tight market conditions and abrupt reversals have proven punishing.
This isn’t AguilaTrades’ first costly misstep at these levels. Just last week, they reportedly turned a $5.8 million gain into a staggering $12.5 million loss on another BTC long, according to blockchain analytics platform Lookonchain.
Range-bound strategy could have outperformed
While the fundamentals behind such trades may seem sound bitcoin has held above $100,000 even amid escalating Middle East tensions that usually weigh on risk assets the price action tells a different story. A more disciplined strategy of buying support and selling resistance would have fared better during this period of sideways trading.
Bitcoin has remained in this range since May 9, repeatedly testing both support and resistance without a clear breakout, leaving overly optimistic leveraged positions exposed to brutal reversals.
