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<p>On-chain data has confirmed that a whale wallet closed a losing short position on Hyperliquid's native token, <a href="https://x.com/search?q=%24HYPE&amp;src=cashtag_click" rel="noopener noreferrer nofollow">$HYPE</a>, realizing a total loss of nearly $7 million. The trader was forced to exit the bearish bet after the asset surged sharply against the position.</p>
<h2 id="a-costly-bet-against-the-rally">A Costly Bet Against the Rally</h2>
<p>The closure comes as <a href="https://x.com/search?q=%24HYPE&amp;src=cashtag_click" rel="noopener noreferrer nofollow">$HYPE</a> has been on a powerful run. <cite>HYPE reached a new all-time high of $64.21 on May 24, squeezing multiple short positions across the platform.</cite><cite>With a price increase of 30.30% in the last 7 days, Hyperliquid is outperforming the global cryptocurrency market.</cite> That kind of momentum is particularly punishing for traders holding short positions, as unrealised losses compound with every tick higher.</p>
<p>The $7M loss is not an isolated incident. <cite>This exit is one of many short-side pain points witnessed on Hyperliquid this month. Just a few days prior, a trader known as Loracle was defending a far larger $103 million HYPE short position, selling 616,675 HYPE worth $36.76 million to shore up the position as prices climbed.</cite></p>
<h2 id="why-short-sellers-are-getting-burned">Why Short Sellers Are Getting Burned</h2>
<p><cite>Short sellers in a rising market face compounding pressure because the higher a token's price climbs, the larger the unrealized loss grows, and the more collateral is required to maintain the position before eventually facing forced liquidation.</cite> On Hyperliquid, this dynamic plays out entirely in public view, with every order, cancellation, and liquidation recorded transparently on-chain.</p>
<p>Several factors have been fuelling <a href="https://x.com/search?q=%24HYPE&amp;src=cashtag_click" rel="noopener noreferrer nofollow">$HYPE</a>'s rally. <cite>Bitwise's HYPE ETF drew $58.73M since its May 12 launch, fueling sustained buying pressure on the token.</cite> Institutional appetite has also broadened, with <cite>Grayscale-linked wallets reportedly accumulating over $40 million worth of HYPE over the past week.</cite> Meanwhile, the platform's own buyback programme has added further support, <cite>with $1.16 billion in buybacks fueling flippening talk.</cite></p>
<p>The broader picture for Hyperliquid remains one of strong fundamentals. <cite>Hyperliquid has established itself as the leading decentralized derivatives venue, controlling approximately 66 to 73% of decentralized perpetuals volume with roughly $50 billion in weekly trading and over 100,000 weekly active users.</cite> For anyone betting against that momentum, the cost of being wrong continues to rise.</p>
<p><strong>Sources:</strong><br><a href="https://news.bitcoin.com/hyperliquid-hype-short-whale-unwinding-may-2026/" rel="noopener noreferrer nofollow">Bitcoin.com: HYPE Hits Record High Valuation as Hyperliquid Whale Dumps $27M to Exit Short</a><br><a href="https://beincrypto.com/hyperliquid-hype-record-ath-whale-activity/" rel="noopener noreferrer nofollow">BeInCrypto: Hyperliquid Whales Show Conflicting Moves as HYPE Hits Fresh Peak</a><br><a href="https://www.coingecko.com/en/coins/hyperliquid" rel="noopener noreferrer nofollow">CoinGecko: Hyperliquid (HYPE) Live Price and Market Data</a></p>

Somebody just lost $7M Shorting $HYPE!

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