Research Summary
The article discusses the potential liquidation risk of a trader known as 0x61, who holds a $12M highly levered $ETH short. There is speculation that the trader will face liquidation if $ETH hits $1945. However, the trader has limit orders set to add $149k to his collateral within the 1935-1945 $ETH price range, which could push the liquidation price to around $1967. The trader also has approximately $224k worth of assets distributed across Arbitrum and BNB Chain that could be used to top up collateral. The article suggests that the danger of liquidation is not as imminent as popularly believed.
Actionable Insights
- Monitor the $ETH price: The trader’s liquidation risk increases if $ETH hits $1945, but limit orders and potential collateral top-ups could push the liquidation price to around $1967 or even $2000.
- Consider the trader’s available assets: The trader has approximately $224k worth of assets that could be used to top up collateral, mitigating liquidation risk.
- Understand the trader’s strategy: The trader has previously mitigated liquidation risk by bridging tokens from other chains to Arbitrum for collateral, a strategy that could be employed again if $ETH prices increase.
