How To Long And Short Bitcoin On Hyperliquid: A Step-By-Step Guide

Given the extreme volatility of the crypto market, trading Bitcoin isn’t just about buying and holding. If you understand market trends, you can take advantage of both price increases and declines.

Longing and shorting are two powerful strategies that allow you to do exactly that. Platforms like Hyperliquid make these strategies accessible through decentralized, high-speed trading tools. This guide walks you through how to long and short Bitcoin on Hyperliquid — step by step.

What is longing and shorting Bitcoin?

Longing Bitcoin means buying it with the expectation that the price will rise. If it does, you sell at a higher price and keep the profit. Shorting Bitcoin is the opposite. You borrow Bitcoin, sell it immediately, and aim to buy it back at a lower price. If the price drops, you profit from the difference. Both strategies involve risk, especially when using leverage.

Risks and benefits of long and short trading in crypto

Long and short positions can increase exposure and returns, but also raise the stakes. Make sure you understand the implications before using these tools.

What is Hyperliquid?

Hyperliquid is a decentralized crypto trading platform built for speed and scale. It offers spot and perpetual futures trading with up to 50x leverage. The platform runs on its own Layer-1 blockchain called HyperEVM and doesn’t require KYC. Users can trade directly from a wallet or sign in with email, making onboarding simple.

Hyperliquid is popular because:

• It has deep liquidity across major assets like Bitcoin and Ethereum.
• Trading is gas-free once you deposit.
• It offers a clean interface with advanced order types.
• It provides high-speed order execution on-chain.
• Traders maintain self-custody of funds.

How to long and short Bitcoin using Hyperliquid

This tutorial covers both perpetual futures and spot margin trading. You need USDC to start. That’s the base collateral for trading on Hyperliquid.

Step 1: Access the trading interface

• Go to the Hyperliquid website and launch the app.
• Log in with your email or connect a wallet.
• Deposit USDC from a supported chain like Ethereum or Arbitrum.
• After the deposit confirms, click ‘Enable Trading‘ to move funds into your trading account.

Step 2: Select your trading method

Hyperliquid supports two ways to long or short Bitcoin:

• Perpetual futures (BTC/USD): These are synthetic contracts that track Bitcoin’s price. They don’t expire, and you don’t need to hold the underlying asset. Instead, you trade contracts that mimic BTC movements. Perpetuals are ideal for short-term trading or for traders who want high leverage (up to 50x). Funding fees may apply if you hold positions for extended periods.
• Spot margin trading (BTC/USDC): This involves borrowing funds to buy or sell real BTC. You own the actual asset when you long, or you borrow it to short. Spot margin trading is better suited for traders looking to hold positions longer without funding fees, or those who want exposure to the underlying BTC.

When to use each method:

• Use perpetual futures for tactical, short-term trades where speed and leverage matter.
• Use spot margin trading when you want real asset exposure or prefer longer holding periods with no funding fees.

Switch between ‘Perps‘ and ‘Spot‘ in the top-left dropdown to choose your method.

Long and short using perpetual futures

1. Choose the BTC-USD market under ‘Perps’
2. Set your order type:
   • Market: Executes immediately.
   • Limit: Executes at your chosen price.
3. Select margin mode:
   • Cross: Uses your full account balance.
   • Isolated: Allocates margin to just this trade.
4. Adjust leverage and size:
   • Use the slider to choose leverage (up to 50x).
   • Enter the size in BTC.
5. Click ‘Buy/Long’ or ‘Sell/Short’
   • Use Buy/Long if you expect BTC to go up.
   • Use Sell/Short if you expect BTC to go down.
6. Monitor your position:
   • Track entry price, liquidation price, and P&L.
   • Close your position manually or set take profit/stop loss levels.
7. Watch for funding fees:
   • Perpetuals charge or pay small funding rates depending on market skew.

Long and short using spot margin trading

1. Switch to the BTC/USDC market under ‘Spot’
2. Transfer USDC to your spot account if needed.
3. Choose your order type and enter size:
   • You can enter more than your balance to trigger margin borrowing.
4. To go long:
   • Use a Buy order to purchase BTC with borrowed funds.
5. To go short:
   • Use a Sell order even if you don’t hold BTC. Hyperliquid will borrow BTC to sell on your behalf.
6. Repay your loan by closing the position:
   • Sell BTC to repay a long.
   • Buy BTC to repay a short.
7. Check your margin health:
   • If the market moves against you too far, you risk liquidation.

Managing leverage

Hyperliquid gives you control over leverage. Use it carefully.

• Cross margin shares risk across all positions.
• Isolated margin limits risk to a single trade.
• Start with low leverage (2x–5x) if you’re new to margin.
• Monitor your liquidation price for each trade.
• You can add or remove margin on open trades.

Use stop loss and take profit

Hyperliquid lets you attach stop-loss and take-profit triggers when opening or managing a position. These tools help manage risk automatically.

• Set a stop loss to exit a trade if it moves against you.
• Set a take profit to secure gains when price targets are hit.

Is Hyperliquid safe to use?

Hyperliquid combines speed and transparency by running everything on-chain. Here’s how it handles safety:

• Non-custodial: You keep control of your funds through your wallet.
• Audited smart contracts: Security firm Zellic audited core components.
• Insurance fund: Hyperliquid uses a liquidity pool to cover losses from failed liquidations.
• Bug bounty program: Rewards researchers who find vulnerabilities.
• No reported hacks to date.

The only caveat: Hyperliquid runs on its own chain with a small validator set, which is less decentralized than Ethereum. But this design choice enables its high-speed trading engine.

Alternatives to consider

If you’re exploring other platforms to long and short Bitcoin:

dYdX

• Decentralized exchange moving to its own chain.
• Offers up to 20x leverage.
• Good for advanced DeFi traders.

GMX

• Fully on-chain, uses pooled liquidity instead of order books.
• Ideal for simple trades with fewer pairs.
• Higher fees than Hyperliquid.

Binance

• Centralized, regulated exchange with deep liquidity.
• Requires KYC.
• Offers advanced trading features but custodial.

Bybit

• Centralized with strong derivatives tools.
• Also requires KYC.
• Professional-grade trading experience.

Final thoughts

Hyperliquid offers a powerful mix of speed, low fees, and on-chain transparency. If you want to long or short Bitcoin with flexible leverage and retain custody of your funds, it’s one of the best options available today. Just remember: use leverage wisely and always manage your risk.