A cryptocurrency investor turned a $125,000 stake into a multimillion-dollar profit trading Ether on a decentralized exchange, even as whales began locking in gains after the recent rally.

The savvy trader turned an initial investment of $125,000 into over $43 million at its peak in just four months before the latest market downturn hit his Ether (ETH) long position.

Despite the market downturn, the trader closed all his positions, locking in a net profit of $6.86 million on Monday, generating an impressive 55-fold return on his investment, according to blockchain data platform Lookonchain.

After depositing the initial $125,000 onto decentralized exchange Hyperliquid, the trader “masterfully compounded his profits, rolling every dollar of gain back into his $ETH long to build a massive” $303 million position, said Lookonchain in a Sunday X post.

The transaction patterns of whales, or large investors, are often monitored by traders to gauge the short-term momentum of the underlying cryptocurrency, as these investors can hold market-moving amounts of capital.

Related: Ether treasuries swell as major firms launch record capital raises: Finance Redefined

Whale moves and ETF flows

Heading into last weekend, US spot Ether exchange-traded funds (ETFs) saw $59 million worth of outflows on Friday, interrupting eight consecutive days of net positive inflows, Farside Investors data showed.

Following Friday’s ETF outflows, more Ether whales have started locking in profit in anticipation of a potential correction during the remainder of the August recess period.

On Monday, a wallet labeled “0x806,” one of the top 100 Ether traders tracked by Nansen, sold over $9.7 million worth of Ether — the second-largest Ether sale during the past 24 hours — data from Nansen showed.

Another top 100 Ether trader, wallet “0x34f,” sold $1.29 million worth of Ether, and numerous other whales sold millions worth of the world’s second-largest cryptocurrency.

Related: Bitcoin briefly flips Google market cap as investors eye rally above $124K

“Ethereum’s strong run has invited some profit-taking, which may limit immediate upside momentum and instead set the stage for consolidation,” according to Ryan Lee, chief analyst at Bitget exchange.

Bitcoin (BTC) and Ether remain “vulnerable to sharper swings on any shift in sentiment,” due to the growing open interest that illustrates the amount of leverage in the current market environment, Lee told Cointelegraph.

Investors should be cautious about any “hawkishness” from the US Federal Reserve or a delay in rate cut expectations, which remains the primary driver of the crypto market, added Lee.

Markets are pricing in an 82% chance that the Fed will keep interest rates steady during the next Federal Open Market Committee meeting on Sept. 17, according to the latest estimates of the CME Group’s FedWatch tool.

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