Trader gains $16M as Ethereum price drops to $3,000

A cryptocurrency trader has reportedly earned nearly $16 million by strategically shorting Ethereum (CRYPTO:ETH) during its recent price decline.

The trader opened a 50x leveraged short position when ETH was valued at $3,388, allowing them to profit as the price fell to approximately $3,107.

According to data from Hypurrscan, this position generated an unrealised profit of $15.7 million, along with an additional $2.3 million in funding fees associated with the leveraged trade.

Leveraged trading involves borrowing an asset to sell it at the current market price and then repurchasing it at a lower price, a strategy that can yield substantial profits but also carries significant risks.

In January 2024, another trader faced a loss of over $161,000 due to liquidation on a similar leveraged position, highlighting the potential downsides of this trading method.

As of February 2, 2025, ETH's price had dropped more than 4% within 24 hours, maintaining a delicate hold above the psychological $3,000 mark.

Analysts suggest that Ethereum will need to see increased blockchain activity and adoption to reverse its ongoing downtrend.

Aurelie Barthere, principal research analyst at Nansen, noted that other layer-1 blockchains are catching up with Ethereum in terms of applications and use cases.

For Ethereum to signal a potential recovery, it must reclaim the $3,400 level, while facing significant resistance at approximately $3,240.

Breaking through this resistance could trigger over $1 billion in leveraged short liquidations, according to CoinGlass data.

At the time of reporting, the Ethereum (ETH) price was $2,535.18.