Memecoin POPCAT experienced a significant drop on Wednesday following a large-scale manipulation event on Hyperliquid (HYPE), one of the leading decentralized exchanges in the crypto market.
POPCAT faces 43% decline due to operational planning
According to A detailed analysis of the situation conducted by DeFi researcher Hanzo on social media site X (formerly Twitter) revealed that an unknown trader executed a well-coordinated strategy approximately 13 hours before the market turmoil.
A trader withdrew $3 million in USDC from the OKX exchange and distributed the funds to 19 different wallets on Hyperliquid. They then initiated significant long positions in POPCAT, accumulating an estimated total exposure of $20 million to $30 million.
to create the illusion that there is a demand for meme cointraders placed a massive buy wall at the $0.21 price range, and the order book had a total of $30 million in orders. This artificial facade of high purchasing intent succeeded in attracting genuine traders, encouraging them to jump on the bandwagon and increase their own purchasing activity.
However, the situation quickly changed when traders removed the buying wall without warning, and POPCAT’s price plummeted instantly. This change liquidated all long positions held by traders.
Unknown trader loses $3 million in collateral, HyperLiquid trader HLP system Open positions are automatically absorbed. This action resulted in approximately $4.9 million in additional losses for HLP and exacerbated the broader market decline across the token.
Hyperliquid faces third major disruption this year
Following this incident, the HyperLiquid team took emergency measures to stabilize the market and close remaining exposures. Shortly after, the platform paused Arbitrage (ARB) Bridgealthough it continued to process deposits and withdrawals successfully.
The community has expressed skepticism about the circumstances surrounding the incident, with many suggesting that this may not have been a random liquidation.
Instead, some believe This event could resemble a deliberate stress test or an attack aimed at destabilizing Hyperliquid’s liquidity system. Some argue that the rapid loss of millions of dollars in such a short period of time seems too calculated to be a mere coincidence.
As Hanzo pointed out in his analysis, this incident marks the third major market disruption in HyperLiquid in 2025 and raises serious questions about exchanges’ approaches to dealing with liquidity concentrations and systemic risk management practices.
After the operation, the POPCAT meme coin plummeted by about 43% from $0.21 to $0.12, bringing the total liquidation amount to about $63 million.
HYPE, the decentralized exchange’s native token, also fell significantly after the event. According to CoinGecko datacurrently trading at $38.25, a weekly decline of 7%.
Featured image from DALL-E, chart from TradingView.com
