Trader Loses $1.98M on KAITO Long Bet as Price Plummets

Crypto markets can be brutal, and one unfortunate trader just learned that lesson the hard way. A market participant using the Hyperliquid decentralized exchange lost nearly $2 million in eight days after taking a large long position on KAITO. The trader closed the position after the token price dropped sharply, racking up a net loss of $1,978,855 alongside trading fees.

The painful trade started when the user opened a position for over six million tokens. Unfortunately for them, the broader market suffered a sharp correction, sending KAITO down more than 27 percent over a seven day period. Selling pressure intensified and triggered a classic long squeeze, which forced bullish traders out and accelerated the downward slide.

Data from derivatives platforms shows that market sentiment around the asset flipped heavily bearish. Open interest dropped notably and funding rates hit some of their most negative levels so far in 2026. Traders should watch funding rates closely moving forward to see if bearish momentum slows down or if the wider altcoin market faces further downside pressure.