What to know:
- Crypto investors build large oil shorts despite rising prices amid tensions.
- Abraxas leads a $135M leveraged oil short using Hyperliquid platform data.
- Rising oil prices clash with bearish bets as Hormuz risks drive volatility.
Crypto-linked investors and whales have amassed substantial short positions in oil as prices rise amid Middle East tensions. On-chain data reveals significant positions against oil, suggesting that there is a divergence between oil’s price momentum and expectations from cryptocurrency-backed traders.
Blockchain analytics firms Arkham and Lookonchain have identified Abraxas Capital as one of the key players involved in the trades.
The London-based hedge fund has an estimated short position of $135 million in crude oil through the Hyperliquid exchange. This hedge fund is registered in the UK and has been transitioning to digital assets.
Oil Shorts Intensify Despite Climbing Brent Prices
The positions are held in two wallets. This gives the hedge fund an overall position comprising 955,000 Brent-linked contracts and 323,000 WTI-linked contracts. These trades use leverage between five and ten times.
However, Arkham highlighted another trader identified as loraclexyz has also entered the fray with a short position that is over $3 million in Brent crude. This trader had also earned $25 million in profits from long positions in Hyperliquid’s HYPE token earlier in the year.
Oil prices have been rising due to geopolitical concerns. The price of Brent crude has climbed towards the range of $105-$114. The price rise is due to geopolitical concerns over Iran and threats to the Strait of Hormuz.
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Hyperliquid Drives Surge in Large Oil Short Positions
This waterway carries a fifth of the world’s crude shipments. Analysts have predicted that if the situation continues, crude prices may rise to as high as $150. However, financial institutions have raised predictions for early 2026.
Despite all this, big crude traders are predicting a drop in crude prices. Their predictions are based on a belief that tensions may ease or supply may normalize. However, this is not in line with the current sentiment.
Hyperliquid has emerged as the main platform for such activities. It facilitates continuous trading and transparent data available on the blockchain. The previous trades by Abraxas’s wallets have reportedly made a profit of over $166 million.
Increasing short positions could also lead to more price volatility in the market. Liquidations could cause prices to rise or fall significantly depending on geopolitical factors and supply.
This article contains market analysis and price predictions. These are not guarantees. Crypto markets are volatile. Always DYOR. Not financial advice.
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