Three prominent trading firms continue to hold significant short positions in Bitcoin and Ethereum despite recent market rallies. According to blockchain tracker Lookonchain, Abraxas Capital, Fasanara Capital, and Wintermute maintain over $600 million in short positions in the two major cryptocurrencies. The firms hold 138,569 Ethereum worth $338 million and 3,425 Bitcoin worth $265 million in short positions. As reported by BeInCrypto, the crypto market rally triggered a wave of short liquidations on August 19, with short sellers losing $1.3 billion within 60 minutes as Bitcoin climbed 2.5%. These positions became the largest short positions on the blockchain after a price surge liquidated bigger whale accounts, leaving the market makers' hedging accounts as the dominant remaining short exposure.
The short positions were particularly impacted by the surge in Hyperliquid (HYPE) prices, which reached a record high of $83.27 on Sunday. According to Lookonchain, Abraxas Capital built about $783 million in shorts on the venue while hedging with spot purchases, withdrawing 73,872 ETH worth roughly $173.17 million from Binance over four days. The firm was hedging heavily with spot purchases at the same time, building about $75 million in unrealized losses on Hyperliquid short positions. HYPE's price was up over 1% during the past 24 hours, with retail sentiment remaining in the 'extremely bullish' zone and chatter at 'extremely high' levels. Hyperliquid saw $6 million in daily fees, exceeding the 24-hour fee totals of the top 5 blockchains, with fee generation rising as its derivatives platform grew.
The remaining short positions face liquidation at prices substantially higher than current market levels. According to Lookonchain, the largest remaining on-chain short positions belong to market makers' hedging accounts. Abraxas Capital's two ETH shorts liquidate at $4,008 and $3,958 while spot trades near $2,440, and BTC shorts liquidate at $128,521 and $140,437 against a $77,381 spot price. Wintermute's Bitcoin position survives until $251,307. No position faces liquidation unless Bitcoin climbs 66% or Ethereum climbs 62%, explaining why the recent rally passed them by. Trigger prices on the positions ranged from $3,946 to $4,988 on the ETH shorts and from $128,521 to $251,307 on the BTC shorts, with Bitcoin trading near $77,300 and Ethereum near $2,455 at the time.
The firms face substantial unrealized losses across their short positions. According to Lookonchain, Abraxas Capital carries roughly $58 million in unrealized losses across its four positions and has not closed any of them. The firm's ETH shorts were opened near $2,064 and $2,111, while BTC shorts near $65,312 and $67,026. Fasanara Capital sits 18.87% underwater on a $74.81 million ETH short at 15X leverage, carrying $16.6 million in unrealized losses. Wintermute emerged as the exception, having entered near $2,447 on ETH and $77,665 on BTC, leaving it marginally in profit on both assets. The three firms held shorts of $338 million of ETH and $265 million of BTC, representing the largest on-chain short positions after the price surge.
The broader short squeeze intensified significantly during the recent rally. As reported by BeInCrypto, short liquidations reached $2.74 billion as 172,202 traders were liquidated, with short sellers then losing another $1.06 billion over the following 24 hours. The data suggests the remaining short exposure represents market-making and hedging activity rather than broad bearish bets, with positions unlikely to face immediate pressure unless Bitcoin and Ethereum extend their rally significantly. On Stocktwits, retail sentiment around Bitcoin remained in the 'extremely bullish' zone, while chatter stayed at 'extremely high' levels over the past day. Similarly, Ethereum's price was up over 1% during the past 24 hours with retail sentiment in the 'extremely bullish' zone. HYPE Spot ETFs saw total weekly net inflows of more than $3.8 million, with cumulative net inflows standing at $287.45 million, below the $308.6 million peak reached in the week to July 10.
