A crypto whale has taken a massive gamble on PEPE, placing a 10x leveraged long position worth $27.53 million on Hyperliquid. However, as PEPE’s price drops, the position faces a serious risk of liquidation.
With unrealized losses exceeding $3.2 million, the whale has injected an additional $3.8 million USDC to stay afloat. But if PEPE falls to $0.005219, the position could be forcibly closed, triggering cascading sell-offs and further market volatility.
How Leverage Could Worsen the Sell-Off
Leverage amplifies both gains and losses. Even small price movements can cause major swings in the whale’s account balance. If PEPE’s decline continues, Hyperliquid’s automated liquidation system will close the position, potentially sparking a market-wide ripple effect.
Mass liquidations often lead to panic selling, worsening price drops. With PEPE already down 5% in the last 24 hours, traders are on edge.
Market Manipulation Concerns
Some speculate the whale is trying to prop up PEPE’s price by adding more margin. However, if they eventually exit their position, it could cause panic among smaller investors, driving the price even lower.
PEPE’s meme coin status makes it highly sensitive to market sentiment, making this a particularly risky bet. External factors like regulatory news or shifting trader interest could push prices down further.
Ethereum Faces Similar Leverage Risks
The PEPE whale isn’t alone. A well-known trader, CBB, has also opened a 10x leveraged long position on Ethereum (ETH) worth $2.11 million. Currently, they are facing a $1.03 million unrealized loss, having entered at $2,730—a price now proving too high in the current market downturn.
While CBB’s margin buffer is larger, these cases highlight the dangers of excessive leverage, especially in a declining market.
What’s Next for PEPE and the Crypto Market?
If PEPE nears the whale’s liquidation price, other traders may start preemptively selling, creating a snowball effect. This could send PEPE and other meme coins tumbling, increasing broader market volatility.
With highly leveraged positions under pressure, the next few days could be critical for both PEPE and Ethereum.
