$30M Manipulation On Hyperliquid: The POPCAT Connection And What You Need To Know

Overview

The memecoin POPCAT faced a considerable downturn after a manipulation event on Hyperliquid, a decentralized exchange. This incident not only impacted the price of POPCAT but also raised concerns about the exchange’s liquidity management and overall market stability.

The Manipulation Event

On a recent Wednesday, POPCAT experienced a sharp decline, dropping approximately 43%. This downturn followed a well-coordinated manipulation strategy executed by an unknown trader on Hyperliquid. According to DeFi researcher Hanzo, the trader withdrew $3 million in USDC from the OKX exchange and distributed these funds across 19 different wallets on Hyperliquid.

Subsequently, the trader initiated large long positions on POPCAT, accumulating an estimated exposure between $20 million and $30 million. To create an illusion of demand for the memecoin, the trader placed a massive buy wall at the price point of $0.21, with orders totaling $30 million on the order book. This artificial demand successfully attracted real traders, encouraging them to increase their buying activity.

However, the situation changed abruptly when the trader removed the buy wall without warning, causing an immediate collapse in the price of POPCAT. This sudden shift led to the liquidation of all long positions taken by traders. The unknown trader lost their $3 million collateral, while Hyperliquid’s HLP system absorbed the open positions, resulting in an additional loss of approximately $4.9 million for the HLP. This manipulation exacerbated a broader market selloff across the token.

Hyperliquid’s Response

In the aftermath of the incident, the Hyperliquid team implemented emergency measures to stabilize the market and address any remaining exposures. The platform paused its Arbitrum bridge but continued to process deposits and withdrawals normally. The community reacted with skepticism regarding the circumstances of the event, with many suggesting that it may not have been a random liquidation. Some believe it could resemble a deliberate stress test or an attack aimed at destabilizing Hyperliquid’s liquidity system.

This manipulation event is notable as it marks the third major disruption on Hyperliquid this year, raising serious questions about the exchange’s liquidity concentration and systemic risk management practices.

Impact on the Crypto Market

• The price of POPCAT dropped approximately 43%, impacting investor confidence in memecoins.
• Total liquidations reached around $63 million, indicating widespread effects on long positions.
• Hyperliquid’s native token, HYPE, also experienced a significant decline following the incident.
• The event raised concerns about the integrity of decentralized exchanges and their ability to manage liquidity risks effectively.
• The community’s skepticism may lead to increased scrutiny of trading practices on Hyperliquid and similar platforms.

Updated: 11/13/2025, 8:31:12 AM