Whale Profits from Leveraged Bitcoin Short
A Bitcoin whale has secured nearly $10 million in profit after closing a massive short position worth over $516 million. The move came just days before the highly anticipated Federal Open Market Committee (FOMC) meeting, which could have significant implications for the cryptocurrency market.
The unidentified investor had taken a 40x leveraged short position on Bitcoin, effectively betting on a price decline. According to Hypurrscan data, the whale opened the initial $368 million position when Bitcoin was priced at $84,043 and would have faced liquidation if the price had surpassed $85,592.
Leveraged trading allows investors to use borrowed funds to amplify their positions, increasing both potential gains and risks. Despite the volatility, the trader successfully exited all short positions within hours, pocketing a $9.46 million profit from Bitcoin’s price drop.
Strategic Moves Amid Market Volatility
The whale was forced to inject an additional $5 million into the short position after a public trading group attempted to liquidate it. However, the effort ultimately failed, allowing the trader to close out profitably, blockchain analysis platform Lookonchain reported on 17 March.
Following the closure of the short position, the investor redirected profits into Ethereum. Etherscan data confirms that they acquired over 3,200 Ether for approximately $6.1 million at 07:31 UTC on 18 March.
FOMC Meeting and Inflation Outlook
The timing of the whale’s move is significant, as it comes just ahead of the FOMC meeting scheduled for 19 March. Market participants eagerly await the Federal Reserve’s stance on interest rates and monetary policy, which could impact Bitcoin and other risk assets.
Recent economic data suggests that inflationary pressures may be easing, with the US Consumer Price Index (CPI) for February showing a 2.8% year-on-year increase, slightly below the expected 2.9%. This could be a positive indicator for financial markets, including cryptocurrencies.
Fumihiro Arasawa, co-founder and CEO of xWIN Research, believes that the lower CPI reading signals a gradual decline in inflation. “This suggests that inflationary pressures are gradually easing, which could influence the Federal Reserve’s monetary policy decisions,” Arasawa stated.
Bitcoin’s Short-Term Outlook
Analysts are closely watching Bitcoin’s key support levels following recent market movements. Arasawa noted that Bitcoin’s short-term stability depends on whether it can hold above the $81,000 support level. “A sustained hold could stabilise sentiment, while a breakdown may trigger further corrections,” he explained.
Market pricing currently indicates a 99% probability that the Federal Reserve will maintain its current interest rate policy, according to CME Group’s FedWatch tool. However, Ryan Lee, chief analyst at Bitget Research, cautioned that unexpected hawkish signals from the Fed could exert pressure on Bitcoin and other high-risk assets.
With the FOMC decision looming, traders and investors remain on high alert, assessing how the central bank’s next moves could shape Bitcoin’s price trajectory in the coming weeks.
