Cloud computing enables on-demand access to remote computing resources. It provides dynamic scalability and elasticity with a low upfront cost. As the adoption of this computing model is rapidly growing, this increases the system complexity, since virtual machines (VMs) running on multiple virtualization layers become very difficult to monitor without interfering with their performance. In this paper, we present hypertracing, a novel method for tracing VMs by using various paravirtualization techniques, enabling efficient monitoring across virtualization boundaries. Hypertracing is a monitoring infrastructure that facilitates seamless trace sharing among host and guests. Our toolchain can detect latencies and their root causes within VMs, even for boot-up and shutdown sequences, whereas existing tools fail to handle these cases. We propose a new hypervisor optimization, for handling efficient nested paravirtualization, which allows hypertracing to be enabled in any nested environment without triggering VM exit multiplication. This is a significant improvement over current monitoring tools, with their large I/O overhead associated with activating monitoring within each virtualization layer.