Bitcoin’s largest traders on Hyperliquid have moved into net short positions for the first time since March, according to analytics firm Glassnode.
The reversal came last week, after the traders had built long positions close to Bitcoin’s market bottom. Glassnode said in a 27 October post that the group could either be positioning for a deeper pullback or risk losses if prices recover and trigger a short squeeze.
The firm described the previous long trade as well timed but stopped short of presenting the new bearish positioning as a definite prediction of lower prices.
Glassnode’s earlier research identified major leveraged liquidation clusters around $85,000 and $87,000. Its 21 October report, “Swept and Refilled”, said a liquidation band near $80,000 had been cleared on 15 October, while another remained around $79,600.
The report suggested forced closures of short positions could help drive Bitcoin towards $87,000. However, it also identified a significant concentration of spot sell orders between $86,500 and $87,500.
Glassnode estimated that buyers who had held Bitcoin for six to 12 months had an average cost near $86,700. Its True Market Mean, which measures the average cost basis of active investors, was approximately $77,600.
How Hyperliquid funding works
Hyperliquid makes funding payments every hour between traders holding opposing positions in perpetual futures contracts. The mechanism is designed to keep perpetual prices close to the spot market.
When funding is positive, longs pay shorts; when it is negative, shorts pay longs. Although payments are made hourly, the published rate is expressed over eight hours.
Hyperliquid’s rules include an interest component of 0.01% per eight hours, or 0.00125% per hour. The final rate also includes a premium based on the difference between the perpetual market and the spot oracle.
The exchange samples prices every five seconds and calculates the premium from the average over each hour. Each payment uses one-eighth of the calculated eight-hour funding rate. Validators determine oracle prices using a weighted median of spot prices from centralised exchanges, with weights based on liquidity.
Wintermute-linked activity
Lookonchain previously recorded 9,458 BTC withdrawn from Wintermute to 40 newly created wallets since 1 October. The transfers were valued at $771.5m and described as accumulation, although the data did not establish how many investors controlled the wallets or their purchase prices.
A separate September report from Onchain Lens attributed $126.25m in Hyperliquid short positions to an address linked to Wintermute. Ethereum accounted for $46.92m, Solana for $11.30m and HYPE for $10.03m.
Wintermute had not confirmed ownership of the address or explained the trades. Market makers can use perpetual contracts to hedge spot holdings, options, customer trades or exposure on other exchanges.
Bitget Wallet research lead Lacie Zhang previously identified $82,000 as a downside threshold and $87,500 as a recovery trigger, with a possible range of $78,000 to $95,000. She said Bitcoin needed to hold $82,000 and regain $87,500 to target $95,000, while a sustained fall below $80,000 would invalidate her bullish October outlook.
Her assessment cited institutional buying, long-term-holder profit-taking and miner selling. ViaBTC chief analyst Jeff Ko highlighted US employment and inflation data.
The Federal Reserve’s policy decision was listed for 28 October, followed on 29 October by September personal income and outlays and the advance third-quarter GDP estimate, both at 8:30am Eastern Time. Minutes from the October meeting were due on 18 November, with the Fed’s final 2026 meeting scheduled for 8-9 December.