A suspected market‑manipulation attack on meme coin POPCAT triggered mass liquidations and left Hyperliquid’s vault (HLP) with an estimated $4.9 million loss.
Key Takeaways:
- A large, allegedly coordinated POPCAT trade inflated then crashed liquidity, causing roughly $25 million in liquidations and a $4.9 million hit to Hyperliquid’s HLP.
- POPCAT saw a massive price decline over 25% in the last 24 hours, trading around $0.1239 as of this writing (8:45AM UTC).
- Hyperliquid briefly paused some bridge/withdrawal functions while assessing the damage, while the incident raise questions about leverage and risk controls on automated liquidity pools.
According to reporting and on‑chain observers, a trader or group opened a very large POPCAT position and used dozens of wallets to create a rapid, artificial spike in buy‑side pressure. That apparent “buy wall” was then removed or reversed, collapsing POPCAT’s price and triggering cascading liquidations that the HLP had to absorb.
Specifically, the attacker reportedly withdrew about $3 million in USDC from OKX, split it across 19 wallets, and initiated long positions en masse on POPCAT, pushing total exposure to between $20–30 million.
Once the artificial pressure had done its work and the buy‑wall was removed, POPCAT’s price plunged. The attacker lost their own collateral, but the broader fallout landed on Hyperliquid’s HLP, which absorbed the bad debt.
Platform Response & Systemic Risk Implications
Hyperliquid appears to have quickly responded once the attack was evident. According to multiple sources, withdrawals and deposits were temporarily paused, particularly on its Arbitrum-based bridge.
One market participant described the episode as “peak degen warfare” as someone torching $3 million just to nuke liquidity and drag HLP into a $5 million loss. The event highlights how decentralized derivatives platforms can become vulnerable when thin depth, high leverage and automated liquidity absorption converge. The incident is being viewed as a cautionary tale for both risk‑teams and retail participants.
POPCAT Price Plunges 25% Amid Surging Volume and Liquidations
POPCAT saw a significant crash following the token manipulation reports. At the time of writing (8:45AM UTC), the token trades at approximately $0.1239, logging a noticeable decline of $26.5% over the previous 24 hours, which is a sharp 1-day swing consistent with the liquidation event.
Technical indicators reflect heightened selling pressure: the common 14‑period Relative Strength Index (RSI) sits in the upper 30s (approx. approximately 39 to 43 on multiple trackers), signifying a shift from over‑bought conditions into neutral‑to‑weak momentum. Trading volume, on the other hand, has surged for the token, which estimates to a 500% increase in volume amid the manipulation reports.
What’s Next?
The immediate focus will be on Hyperliquid’s full disclosure of losses and their remediation plan for HLP depositors. Platform reliability and user confidence could hinge on how transparent and swift the response is.
For the broader market, this event may prompt exchanges and protocols to reassess leverage limits, check order‑book depth for thin‑liquidity assets and strengthen automated LP safeguards.
For traders and investors, the incident serves as a reminder: participation in speculative meme coin markets with thin depth remains high risk, and triggers exist that can rapidly escalate losses not just for individuals but for entire protocol liquidity pools.
Summary
A coordinated manipulation of meme coin POPCAT reportedly caused roughly $25M in liquidations and left Hyperliquid’s vault with an estimated $4.9M loss, prompting paused bridge functions and renewed scrutiny of leverage and risk controls.
