Ethereum Trader Rakes in $16M Profit as ETH Crashes to $3K

A smart trader has profited from Ethereum (ETH) even as the leading altcoin slumped to $3,000. Amid the risk of leveraged trading, this trader raked in almost $16 million by betting on ETH’s price drop.

Notably, the trader has made an unrealized profit worth $15.7 million on a leveraged Ethereum short position. By betting on Ethereum’s drop, the trader “borrowed” ETH from a broker and resold it when the dip occurred.

Leveraged Short Bet Pays Off

As per Hypurrscan data, this trader opened the 50x leveraged short position when ETH changed hands at $3,388. At the time, Ethereum’s liquidation threshold was $4,645. They also made an extra $2.3 million in funding fees for this leveraged position.

Analysts say the trader’s profit-taking highlights the cryptocurrency market’s variations. While most traders expected to lose with Ethereum’s price decline, they accumulated gains from their calculated risk.

Experts caution on opening leveraged trade, especially for new market entrants. They explained that although leveraged trading has the potential to increase investment returns massively, the risks are likewise huge. Sometimes, leveraged trading can wipe out one’s initial investment capital.

About a year ago, a trader with the name “Tarded Degen Gambler (@0xTDG)” on X reportedly lost over $160,000 in a single trade. He was liquidated in a leveraged position, and all his funds were wiped clean, leaving him appealing for support. This emphasizes the risk of leveraged trade in the crypto space.

Ethereum’s Potential Rebound

Despite the current volatility Ethereum is experiencing, some crypto traders believe the altcoin has the potential to post a rebound. Renowned trader on X, Cas Abbé, believes ETH is forming a bullish divergence pattern based on the coin’s chart.

Abbé, however, notes that for Ethereum to continue in an upward trajectory, it needs to close above $3,400. Once it hits that level, ETH could easily rally to the elusive $4,000. ETH must break the $3,240 resistance level to achieve these price projections. Some have predicted ETH could soar as high as $12,000 in 2025.

Ethereum Price Outlook

As of this writing, Ethereum is trading at $3,063.80, representing a 5.94% decline in the last 24 hours. Despite the price dip, investors remain enthusiastic, as seen by a 13.85% increase in trading volume to $26.5 billion.

The coming days will reveal if ETH can rebound amid the growing inflation concerns in the broader financial U.S. space.