Whale short attack on HYPE turns into a public on-chain showdown
On-chain analysts have revealed a dramatic story unfolding around the HYPE token on Hyperliquid, where a single trader attempted to push the price down through massive short positions — only to become the target of a coordinated counter-move by the wider community.
On-chain detectives connect 55 wallets to one trader
Blockchain investigators linked 55 separate wallets to a single entity that had been aggressively shorting HYPE ahead of the expected token unlock. These wallets collectively opened short positions totaling approximately 2.1 million HYPE, valued at around $67 million since November 22.
This heavy sell-side pressure kept the token under sustained downward tension, shaping market sentiment and attracting close attention from on-chain trackers.
Liquidation zone sits just 5% away
As details of the short positions became public, it was revealed that the trader’s liquidation price sat only about 5% above the current HYPE price. This made the position extremely vulnerable to even a small coordinated upward push.
Once the situation became known, attention quickly turned into action.
A second whale enters with $32 million to trigger a squeeze
A large counterparty stepped in, depositing approximately $32 million in USDC before starting to aggressively buy HYPE on the open market. This systematic accumulation pushed the price higher step by step, directly targeting the short whale’s liquidation zone.
As the price moved up, the short seller tried to close positions, but the upward momentum accelerated faster than the exits could be executed.
The crowd joins and the price surges
Seeing what was unfolding, retail traders and speculators joined the buying pressure. The combined force of one large buyer and thousands of smaller participants created a powerful short squeeze scenario.
HYPE surged at a pace that overwhelmed the remaining short positions, triggering automatic liquidations by the platform’s risk engine.
Over $31 million wiped out in cascading liquidations
In the final phase, the system liquidated the short whale in two major blows: first for around $8.45 million and then for roughly another $23 million. After these cascades, the massive short position was completely eliminated.
What started as a calculated bet against HYPE turned into one of the most visible liquidation events on Hyperliquid, highlighting both the risks of oversized positions and the power of transparent on-chain data.
What this event tells us about today’s market
This situation demonstrates several key dynamics of modern crypto markets:
– Large positions are increasingly visible due to on-chain transparency
– Communities can act quickly when information becomes public
– Leverage remains one of the biggest risks in volatile environments
For HYPE, this event has shifted sentiment from fear to renewed interest, as traders reassess the token’s short-term and long-term trajectory.
