Crypto trader shorted the top, still lost 3,963%

DAO token RAVE rallied to an all-time high of $19.85 this month before dumping down to $11.80 and allowing a patient trader to short a large amount at $19.

Incredibly, however, after the token declined 23% in his favor below $15, his profit and loss figure still read -3,963%.

The trader, who goes by the name “Meekdonald” on X, shared the screenshot of his leveraged ByBit trade on April 15. It showed a 12x leveraged short on RAVE/USDT with an entry price of $19 and a then-current price of $14.70.

Commentators described the token’s rally, which Meekdonald timed to nearly the “pico top,” as a coordinated scheme to lure and liquidate short sellers.

Three wallets held roughly 90% of the token’s total supply.

Nevertheless, shorting it proved incredibly difficult and expensive.

A winning crypto short became a 3,900% loss

The culprit was the astronomical funding rate on ByBit’s perpetual futures contracts.

In perpetual futures, funding rates are periodic payments between longs and shorts and keep the contract price anchored to spot.

When short interest dominates, the rate turns negative, meaning shorts pay longs. The more crowded the short side becomes, the higher the cost.

During RAVE’s squeeze above $19, funding rates on major exchanges reached annualized levels as high as 4,800%. On Binance, the hourly rate hit -2%.

A short seller owed 2% of notional position value every hour, or 48% per day.

Amplify those 48% daily payments by the leverage ratio, and the losses start to make more sense.

At a 12x leverage on a cross-margin position, a -2% hourly funding rate on that notional value could drain roughly 24% of his collateral per hour.

The spot price fell from $19 to $14.70, rewarding his prediction that RAVE would decline in value. However, the cumulative funding payments overwhelmed the unrealized profit anyway, pushing ROI to nearly -4,000%.

The price moved in his direction but short funding rates moved even faster.

Read more: Outdated algorithm caused $650M excess losses on Hyperliquid, report

Social reaction

The screenshot went viral after WazzCrypto’s quote-tweet hit 130,000 views. He rendered his final verdict with a reference to the 1983 film WarGames: “The only winning move is not to play.”

Several replies called the screenshot fake. WazzCrypto defended its plausibility in a follow-up, noting that cross margin at 12x leverage checks out against known RAVE funding rates.

Others learned a broader lesson.

One trader posted that catching RAVE’s exact top wouldn’t matter because funding alone would destroy the position, while another warned anyone planning to short RAVE to watch the funding rate or risk handing all profits to the longs.

RAVE was trading near $11.80 at time of writing, down roughly 40% from its peak above $19.

The funding rate has since fallen from -2% per hour to -0.2%, and on some venues has flipped positive to more normal conditions.

The squeeze is over. Unfortunately, for at least one short-seller, timing the top was a terrible decision.

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