HYPE in decline: Whale liquidation generates losses of US$ 4 million in Hyperliquid's vault

• Whale liquidation on Hyperliquid.
• Loss of $4 million in HLP vault.
• 8,5% drop in HYPE price.

A major liquidation event at Hyperliquid resulted in $4 million in losses from the HLP (Hyperliquidity Provider) vault and an 8.5% drop in the price of its native token, HYPE. The incident sparked debate in the cryptocurrency community, with some speculating about possible manipulation, while Hyperliquid reiterated the absence of an exploit or hack.

HYPE’s drop from roughly $14,04 to $12,84 came after a whale who deposited 15,23 million USDC to open a long Ethereum (ETH) position was liquidated, according to data from blockchain analytics platform Lookonchain. The position reached 160.234 ETH, worth a total of $306,85 million. Despite the liquidation, the trader withdrew 17,09 million USDC, recording a gain of $1,86 million.

“Madness! This whale has swapped all of his $BTC long positions to $ETH longs. The current $ETH long position has reached 140.458 $ETH ($269,8M)! Entry price: $1.900,2 Liquidation price: $1.877 Unrealized profit: $2,92M.” highlighted the platform. “This whale just deposited another 10M $USDC into Hyperliquid to place a limit order at $1921. His long $ETH position reached 141.013 $ETH ($271,6M)! Entry price: $1.900,28 Liquidation price: $1.805 Unrealized profit: $3,65M,” he added.

At the time of publication, HYPE’s price was trading at $13,26 with a 5.0% increase in the last 24 hours. According to market data, the token traded lower at the $12,85 level earlier today before starting a new upward movement with a peak at $13,98.

In your release In an official statement about the incident, Hyperliquid clarified that the event was not the result of a network exploit or hack, but rather the inability of the settlement mechanism to handle the size of the position.

“There was no exploit or protocol hack. This user had unrealized PNL, withdrew it, which reduced their margin, and was liquidated. They ended up with ~$1,8M in PNL. HLP lost ~$4M in the last 24h. HLP’s all-time PNL remains at ~$60M. As a reminder, HLP is not a risk-free strategy. Max leverage will be updated for BTC and ETH to 40x and 25x respectively to increase maintenance margin requirements for larger positions. This will provide a better buffer for backstop liquidations of larger positions.”

Hyperliquid (HYPE) trading volume was $192.784.832 in the last 24 hours, representing a 9,00% drop from a day ago and signaling a recent drop in market activity.

The cryptocurrency Hyperliquid (HYPE), is quickly gaining attention in the market. HYPE is a newly launched token that enables secure and low-cost payments through direct transactions, without intermediaries.