The Silent $600 Million: Why Three Trading Firms Still Short Bitcoin and Ethereum After the Rally

The numbers came in on a quiet Friday. Lookonchain flagged it first, then Onchain Lens confirmed the details. Three trading firms, Abraxas Capital, Fasanara Capital, and Wintermute, still hold over $600 million in combined Bitcoin and Ethereum short positions. The market has rallied hard. Bitcoin trades at $77,381. Ethereum sits at $2,440. And these firms remain short. The initial reaction is to call them foolish. But the data tells a different story. The liquidation prices on these positions are so far above the current spot price that they reveal something else entirely. These are not directional bets against the market. They are hedges. The code does not lie, but it can be misunderstood. The market context matters here. August 19 was brutal for bears. In a single 60-minute window, short sellers lost $1.3 billion as prices ripped higher. The total short squeeze liquidation across the market reached $2.74 billion. It looked like a total victory for the bulls. Yet, when the dust settled, the on-chain data showed these three firms had not capitulated. They had not covered their positions. Abraxas Capital alone holds four separate short positions with a combined unrealized loss of approximately $58 million. They have not closed a single one. Fasanara Capital runs a 15x leveraged ETH short that is currently underwater by 18.87%. Wintermute, the market maker, has increased its short exposure on Hyperliquid to roughly $190 million. Let me walk you through the technical structure of these positions, because this is where the market narrative breaks down. The liquidation price for Abraxas Capital's BTC shorts is between $128,000 and $251,000. For their ETH shorts, it is between $3,958 and $4,008. The current spot price is $77,381 for BTC and $2,440 for ETH. Do the math. Bitcoin would need to rally another 66% from current levels just to trigger the first liquidation. Ethereum would need to climb 62%. These are not distressed positions. They are structured with enough margin headroom to survive a massive move higher. This is the signature of a delta-neutral strategy, not a bearish thesis. In my experience auditing trading desks and their risk frameworks, this is textbook market maker behavior. They are providing liquidity and hedging their inventory, not expressing a view on price direction. The contrarian angle here is that the market narrative of an ongoing short squeeze is losing its fuel. The weak hands have already been broken. Trust is earned in drops and lost in buckets. The shorts that remain are held by sophisticated institutions with deep pockets and precise risk models. The easy squeeze has already happened. The forced buying that drove the August 19 rally is largely exhausted. What remains is a structural hedge book that will not capitulate unless we see a move of historic proportions. This means the marginal buyer that was pushing prices higher may now be gone. The market is entering a phase where the bid needs to come from genuine spot demand, not from short covering. That is a very different market regime. There is also a deeper signal in this data that most retail traders will miss. Wintermute's decision to run nearly $200 million in short exposure through Hyperliquid is not just a hedge. It is an endorsement of the platform's infrastructure. In the silence of the dip, the weak hands break. But in the silence of the rally, the smart money builds. Hyperliquid has quietly become a venue where top-tier market makers are willing to deploy institutional-sized capital. This is a signal about the maturation of on-chain derivatives. Based on my experience tracking order flow and liquidity provision since 2017, I can tell you that market makers do not put real money on platforms they do not trust. The fact that Wintermute is using Hyperliquid for this scale of hedging operation tells me the platform has passed the institutional vetting process. That is worth more than any marketing campaign. The risk picture is more nuanced than the headlines suggest. The immediate liquidation risk is low, as I have outlined. But the risk of a continued rally triggering a cascade is not zero. If Bitcoin somehow accelerates toward that $128,000 level, the forced buying could create a feedback loop. The probability is low, but the impact would be severe. More pressing is the risk that these hedging positions themselves add downward pressure on price in the near term. A market maker holding $190 million in shorts is not passive. They are actively managing that book, which means selling into strength to maintain their delta. This creates a ceiling on rallies and contributes to the chop we are seeing. In the silence of the dip, the weak hands break. But in the noise of the rally, the professionals accumulate. What does this mean for the next few weeks? The data suggests we are in a consolidation phase. The short squeeze narrative has played out. The remaining short positions are structural, not speculative. The market needs a new catalyst to break out of this range. Watch the funding rates. If they stay positive and open interest climbs, the market is building for another leg up. If funding flips negative and open interest drops, the hedgers are unwinding and a pullback is likely. The key levels to monitor are $70,000 on Bitcoin and $2,200 on Ethereum for the downside. On the upside, $85,000 and $2,700 are the first resistance zones. Trust is earned in drops and lost in buckets. The next move will tell us which side is building trust.