According to Lookonchain, Abraxas Capital purchased 13,000 ETH worth $32.39 million in the spot market on September 8 to hedge its 141,180 ETH short position on Hyperliquid. The transaction was executed at an implied price of approximately $2,491 per ETH, covering just over 9% of the short position when measured by the number of ETH tokens. The hedge strategy provides Abraxas with exposure to ETH in opposite directions - the short position benefits from declining Ether prices while the spot ETH gains value when the token rises. This spot purchase allows Abraxas to balance exposure between gains from price rises in spot ETH and profits from the short position if prices fall, reflecting a cautious approach to managing risk amid volatile market conditions.
As reported by Lookonchain, the latest purchase leaves Abraxas Capital with 128,180 ETH of net short exposure before considering any other holdings or positions. The firm's Hyperliquid short position is valued at approximately $353.27 million, significantly larger than the $32.39 million spot hedge. This positioning reflects Abraxas's continued bearish stance on Ether despite the recent recovery from early September lows, with ETH trading near $2,493 following a move between $2,475 and $2,537 on September 7. The firm remains heavily net short despite the hedge, maintaining its overall negative exposure to Ether price movements.
According to Lookonchain, the transaction occurred while Ether remained close to the $2,500 level following a recovery from early September lows. On September 2, ETH had fallen to an intraday low of $2,356 after failing to clear resistance near $2,550, with approximately $94.2 million in ETH futures positions liquidated over 24 hours. The token later recovered toward the $2,500 area, putting Abraxas's latest 13,000 ETH spot purchase close to the same price zone. Large leveraged positions have become common on Hyperliquid, with whale accounts carrying several billion dollars in combined positions this year. The move comes amid active institutional demand for spot Ethereum and fluctuating ETH prices around $2,500.
As reported by AMBCrypto, Abraxas Capital has been aggressively shorting the market in recent weeks, with the firm building $783 million worth of short positions on Hyperliquid and purchasing $173 million on the spot to hedge risk. However, since then, this position has reduced significantly. Despite the reduction, liquidation risk for short positions remains extremely elevated, with $7.3 million worth of short positions liquidated over the past 24 hours. Abraxas understands the associated risks with such elevated leverage and has turned to spot hedging as a risk management strategy, hoping one side could absorb risk from the other. Often, purchasing on the spot leaves the firm safe in case the price pumps and shorts are forced out of the market.
According to AMBCrypto analysis, Ethereum remains stuck within a thin range but shows potential for a breakout. The Exchange Supply Ratio (ESR) has been declining over the past week, dropping to late August levels, indicating that supply that surged in early September has been absorbed. With the ESR dropping, it indicates more outflows compared to inflows, which have historically helped assets make gains on the charts. ETH's momentum indicators have held positive throughout this period of consolidation, with the Momentum Shift indicator hovering around 766, suggesting the lows are not as deep. If current market conditions hold, Ethereum is likely to continue moving sideways with $2,500 as resistance, but if spot buying continues to reduce available supply, a breakout could be observed with $2.8k as a target.
