The most significant and dangerous short on Ethereum (ETH) in recent memory is on the brink of disaster.
This case reflects the experience known to traders like Andrew Tate and James Wynn, highlighting the risks of high-leverage bets.
Whale Expands Losses on Ethereum Bet... From $10.7 Million to $26 Million
Lookonchain has been tracking the whale address 0x8c58. According to the blockchain analysis account, this large holder is facing over $26 million in unrealized losses on a 20x leverage short on ETH.
According to Lookonchain's latest update, this whale will be liquidated when ETH reaches $5,002.3, unless more margin is added to the decentralized derivatives exchange Hyperliquid.
Whale 0x8c58, who shorted $ETH at 20x leverage, has lost over $26M!
โ Lookonchain (@lookonchain) August 13, 2025
If he doesn't add more margin in time, he will be liquidated when $ETH reaches $5,002.3.https://t.co/d67B8Z2b53 pic.twitter.com/ierjNvWkAg
At the time of writing, Ethereum is trading at $4,636, having risen over 8% in the past 24 hours. This means the whale address 0x8c58 has just over 7% left before liquidation.
The story began on July 12, when 0x8c58 started shorting ETH at around $2,969. By July 18, just a week later, the position had lost over $10.7 million due to ETH's price surge.
This forced the whale to inject $3.58 million in USDC to push the liquidation price to $4,006.2.
The losses continued into August. On August 10, Lookonchain reported another $8.6 million USDC deposit to extend the liquidation level to $4,885.3.
However, Ethereum's relentless rise has erased that margin. Today, the whale's deficit stands at $26 million.
The Allure of a Textbook Leverage Trap
High-leverage trading on platforms like Hyperliquid has been a topic of discussion for months. According to a recent BeInCrypto report, other notable traders, including controversial figure Andrew Tate and notorious whale James Wynn, have used similar strategies with massive losses.
Tate was reported to have lost $583,000 with a 35.5% win rate across more than 76 trades, ending with a risky 25x leverage long on ETH.
Meanwhile, James Wynn, who held $87 million in trading profits, lost most of his earnings through excessive leverage positions, including a $100 million Bitcoin long and misguided meme coin bets.
While 0x8c58's short position is much larger than those of the two, the pattern is familiar: aggressive leverage, volatile assets, and repeated margin injections that buy time but provide no comfort.
Analysts warn that leverage above 10x increases liquidation probability by over 40%, especially when market momentum moves against the trader.
Financial technology company OneSafe revealed an incident in March 2025 where a whale lost a $200 million ETH position on Hyperliquid due to insufficient margin.
That trader used 50x leverage, demonstrating how quickly situations can deteriorate.
"High-leverage trading can be a double-edged sword... it offers an attractive opportunity for profits but... can lead to substantially destructive losses," noted the OneSafe analysis.
These episodes highlight the transparency and risks of decentralized exchanges (DEXs). Hyperliquid's on-chain nature makes all positions, margin additions, and losses visible in real-time. However, the same openness reveals how even experienced traders can quickly fall into catastrophic losses.
With institutional interest and ETF inflows pushing ETH towards $5,000, it will be interesting to see if whale 0x8c58 can avoid liquidation. If not, they could become the latest warning in the DeFi leverage risk trap.
