Trader Wins 26 Bets in a Row; Zcash and Strategy Shorts Are Bleeding

Key Takeaways

$1,317 Is the Number on the Screen

A Hyperbot dashboard revealed the trader’s potentially unfortunate story in one row:

Short 15,784.87 ZEC, cross margin at 5x, entry $866.90, mark $1,202.51, liquidation $1,316.95, unrealized loss $5,269,660, or 139% of the margin behind it.

However, by Monday morning ZEC had printed a 24-hour high of $1,249 and was trading around $1,200, about 10% below the liquidation line. At 5x cross leverage, the whole account backs the trade. Account equity is $3,755,558, but free margin available: $0.

The Two Shorts

The ZEC bet is not the only one, given that the same address is short 30,000 tokenized Strategy shares on Hyperliquid’s HIP-3 equity perpetuals, isolated at 8x, entered at $133.35 with the mark at $146.04. That leg is down $381,812, or 52% of its margin, with liquidation at $162.37. Strategy stock closed Sept. 5 at $142.55 on Nasdaq, so the onchain mark ran a little hot over the weekend.

Both trades are the same idea, i.e. fade the two most crowded rallies of September. ZEC is up 134% in 30 days. Strategy resumed buying bitcoin on Aug. 31 with 4,603 BTC at an average $80,318, taking its holdings to 845,050 BTC, and its shares trade as a leveraged proxy for bitcoin’s price.

Position value across the two legs stand at $23.34 million, against $3.76 million of equity, a 6.26x account-level leverage ratio. Because the ZEC leg is cross-margined, it draws on the account’s full perpetuals equity of $3.65 million. The MSTR leg’s $732,163 of isolated margin is walled off from it, which means it cannot be lost to a ZEC squeeze (but at the same time cannot be used to survive one).

The Streak

What makes this account worth watching is the record. Hyperbot’s all-time perpetuals profit still shows $3.29 million, down from roughly $10 million at the start of September. Win rate over the past week is 66.67%, while maximum drawdown is at 65.92%.

In other words, a three-day-old short has given back about two-thirds of everything the streak earned. Here are three ways this ends:

The squeeze: ZEC has a record $2.4 billion of open interest, per Coinalyze, and $34 million of shorts were liquidated when it crossed $1,000 on Sept. 4. The largest short on the venue, by Garrett Jin, is $25.7 million underwater from a $444 entry and still holding. If Jin covers, the buy-back could carry ZEC through $1,317 in minutes.

The retrace: ZEC’s 24-hour range over the past 24 hours already spans $1,024 to $1,256. A pullback toward $1,000 would cut losses by roughly $3 million and rebuild the trader’s margin.

Fresh collateral: With $105,813 of spot holdings and no free margin, the trader would need to deposit to move the liquidation price. Nothing in today’s data shows that to be the case.

Shorts have won this fight before, as evidenced by Jin covering a ZEC short for $11.24 million in June when the privacy coin rolled over. The difference now is that the streak trader has no margin left to wait it out. Interesting week ahead!