Warning! The market maker might be about to crash! $59 million HYPE spot "precursor to a sell-off"? Loracle begins small-scale reduction of HYPE short positions

Loracle's transfer of spot holdings and slight reduction of short positions are passive actions by this HYPE long/short whale under continuous massive unrealized loss pressure. Within a month, it has unlocked and partially sold nearly $500k worth of HYPE spot to maintain a short position of up to $114 million. The market previously expected it to sell the newly unlocked spot.
The key detail is the pace and scale of its short position reduction. Currently, it is slowly reducing about $500k at a time, totaling around $3 million, compared to the total short of $114 million and an unrealized loss of $35.5 million. This move seems more like a technical adjustment to address the "naked short" risk after spot transfer rather than a strategic shift. Its $23 million margin is almost entirely used to sustain this short, with liquidity extremely tight. If HYPE's price continues to rise, the risk faced is no longer just an expanding unrealized loss but a forced liquidation due to margin insufficiency, which could trigger chain liquidations.
On May 30, according to Hyperinsight monitoring, the largest short trader Loracle pledged 893k HYPE spot tokens, which were unlocked yesterday early morning, and today further transferred to its HyperEVM address, worth about $59 million. Currently, there are no further actions on the spot position. Notably, Loracle's short reduction began two hours ago, currently reducing about $500k per transaction, totaling approximately $3 million in short positions. Its short holdings are huge, still valued at $114 million with an unrealized loss of $35.5 million. Of the $27 million margin in its account, about $23 million is used to maintain this position.
In the past month, this whale has unlocked a total of 893k HYPE, worth about $63.51 million, twice. On traceable on-chain records, it sold 557k HYPE on May 21, valued at about $33.35 million. The market generally expects Loracle to sell the newly unlocked 893k HYPE. Additionally, this sell-off may be accompanied by short position reduction, because if the spot is sold without adjusting the short stop-loss, its $104 million HYPE short exposure will turn into a naked short, exposing it to potential forced liquidation. If short squeeze occurs, potential losses could exceed $500k, enough to wipe out all its spot gains. $HYPE
{future}(HYPEUSDT)