Cryptocurrency trader “Machi Big Brother” faces $27.5 million in losses due to repeated liquidations at HyperLiquid

Popular crypto trader and NFT influencer Machi Big Brother has taken a huge hit to his portfolio after a series of partial liquidations of highly leveraged Ethereum betting positions on the decentralized derivatives platform Hyperliquid.

According to on-chain analysis, the capital balance in Machi’s trading account has now decreased to approximately $92,000, a significant decrease due to several weeks of active exposure to the crypto market.

Millions of dollars in crypto deposited and lost within 20 days

Traders traded around $3.19 million, according to cryptocurrency and blockchain records. $USDC Amount deposited as margin in the past 20 days. These capital injections failed to improve account balances as losses due to market pressures and leverage continued.

Estimated cumulative realized and unrealized losses now stand at over $27.5 million, highlighting the dangers of highly leveraged directional bets in volatile crypto markets.

This episode has quickly become one of the most-watched liquidation events in recent weeks, capturing the attention of both institutional investors as well as retail traders observing risk behavior in the decentralized perpetual futures market.

High leverage long positions on Ethereum

The core of the losses consisted of concentrated longs in Ethereum. According to trading records, Mr. Machi had an exposure of approximately $1,689. $ETH This equates to approximately $3.28 million during the reporting period.

This position was highly leveraged, with multiples reported in excess of 35x, with little margin against adverse price movements. The liquidation threshold was set at nearly $1,929 per case. $ETH And with the price of Ethereum fluctuating, the trade was in dangerous territory.

Margin was used well above safe levels, and even the slightest downside volatility resulted in forced closing of positions, leading to repeated partial liquidations and compounding losses.

A textbook example of leverage risk

According to cryptocurrency market analysts, this incident is a perfect demonstration of how leverage increases both confidence and risk. Leveraged perpetual contracts allow traders to manage large exposures using very small amounts of collateral, but these contracts also form small liquidation bands.

And the accounts presented are:

• Peak stress margin greater than 140%.
• The directional bias during long exposures is 100%.
• The decline in net profit or loss is accelerating.
• Weakness in rebalancing after cryptocurrency volatility increases.

This can easily get out of control if the market reverses positions, especially on decentralized exchanges where the clearing process is automatic based on how the protocol works.

Broad impact on DeFi derivatives market

This clearing represents an increase in the size and maturity of on-chain derivatives exchanges such as HyperLiquid, which support multi-million dollar leveraged trades similar to centralized exchanges.

Nevertheless, the openness of blockchain-based trading means that losses are experienced in real-time in front of a global audience, which further increases the psychological impact on the market and sparks a massive debate about risk management practices.

Industry observers observe that while decentralized leverage products allow access to complex strategies, they also require an institutional level of discipline that not all traders apply.

Market volatility continues to worry traders

This loss comes at a time of increased volatility for most crypto assets, especially Ethereum, which has seen extreme price swings under changing macro sentiment and liquidity environments.

Consolidation periods can also be tough for leveraged traders, as a lack of clear directional movement can cause prices to plummet.