On May 31, according to monitoring, the largest short seller "Trader Loracle" has been reducing their short positions for 9 hours, with each reduction ranging from $4 million to $893k. Their short holdings are massive, having reduced $7 million so far, with remaining short positions still valued at $108 million, and an unrealized loss of $34.6 million. Of the $27 million margin in their account, about $23 million is used to maintain this position.

Additionally, the 893k HYPE spot tokens that were pledged have today been further transferred to their HyperEVM address, valued at approximately $59 million. Currently, there are no further actions on the spot position.
Loracle’s ongoing position reduction and the hovering of the $59 million HYPE spot tokens represent a critical tactical adjustment by this early player in the Hyperliquid ecosystem under significant unrealized loss pressure. From building a short position near $41 in late April to becoming the platform’s largest short in mid-May, their short size once exceeded $110 million. However, the strong performance of HYPE’s price caused their unrealized losses to continue expanding, reaching $31 million on May 27, with their margin nearly exhausted.
The recent unlocking and transfer of large amounts of spot tokens to the HyperEVM address, which was widely seen as a precursor to a dump, has not yet resulted in any action.
Their position reduction has lasted 9 hours, but the spot remains unmoved. This is not simply a stop-loss, but a strategy to avoid the risk of a "naked short" caused by selling spot while the short position is not closed. If spot selling triggers a price rebound, their remaining short exposure of over $1.12M could face a forced liquidation, with potential losses consuming all spot gains.
A month earlier, this whale had unlocked a total of 557k HYPE tokens twice, worth about $63.51 million. In traceable on-chain records, they sold 557k HYPE tokens on May 21, worth approximately $33.35 million. The market currently expects Loracle to sell the newly unlocked 893k spot tokens. Additionally, this sale may be accompanied by short position reductions, because if spot is sold without closing the short and stop-loss, their $104 million HYPE short exposure could turn into a naked short, risking a forced liquidation with potential losses exceeding $893k, enough to wipe out all their spot gains. $HYPE
{future}(HYPEUSDT)