Hyperliquid has revealed Whale manipulation! 16 million USDC seconds smashed XPL with a big pump of 200%, with a liquidity kill hidden behind the tens of millions in profit.

A Whale deposited 16 million USDC on Hyperliquid and established millions of XPL long positions within minutes, instantly "sweeping" the order book and liquidating all short positions, driving the XPL price from $0.58 to $1.80, an increase of over 200%. After partially closing the position, the Whale made a profit of $16 million in seconds, with the community speculating that it was the founder of TRON. The event also exposed the extreme risks under the weak liquidity of the decentralized exchange, with the HLP liquidity pool losing nearly $12 million in a single day. This article deeply analyzes the Whale's operational patterns, the causes of liquidity crashes, and strategies for retail investors.

[Whale Lightning Strike: 16 million USD quickly swept the order book]

According to on-chain data monitoring by Lookonchain, a mysterious address deposited 16 million USDC at once on Hyperliquid and continuously broke through multiple price levels of XPL with large buy orders, forcing all short positions in the market to close. The price of XPL violently surged from $0.58 to $1.80 within 2 minutes, setting a record for the fastest rise in history.

The Whale closed part of the position at the price peak, locking in a profit of 16 million USD in just 60 seconds, and still holds a long position of 15.2 million XPL (approximately 10.2 million USD). The community generally speculates that this address belongs to TRON founder Justin Sun, and its trading style is highly similar to the previous JELLY token sniping incident.

(XPL Price Volatility | Source: TradingView)

[Liquidity Pool Double-Edged Sword: HLP Daily Deficit of 12 Million USD]

Despite the substantial profits made by whales, the HLP liquidity pool of Hyperliquid only earned $47,000 in fees during this volatility. However, in a similar manipulation event involving the JELLY token, this liquidity pool suffered a loss of nearly $12 million in a single day. This reveals the dual risk faced by liquidity providers (LPs): earning trading fees on a daily basis, but potentially facing massive liquidation losses during extreme market conditions.

The Hyperliquid team promised to compensate affected traders and strengthen risk control after the JELLY incident, but this XPL incident once again proves that in a low liquidity market, whales can still create price tsunamis with their financial advantages.

[Retail investors tragically become leeks: Order book penetration and chain liquidation mechanisms]

Behind the 200% surge of XPL is the brutal manifestation of the "order book sweeping" mechanism of decentralized derivative exchanges. When market liquidity is insufficient, large orders can instantly break through multiple price levels, triggering a chain liquidation. Retail investors often become victims of whale operations due to delayed reactions and excessive leverage.

In this event, the Hyperliquid order book was completely bought out at one point, and most traders failed to withdraw their orders or close positions in time, ultimately facing a collective liquidation. This pattern highlights the high risks of trading in low liquidity markets—whales can easily manipulate short-term trends, causing retail investors to suffer huge losses.

[Three Major Retail Investor Survival Guides: Avoiding Whale Harvesting Strategies]

For emerging derivatives exchanges like Hyperliquid, retail investors need to be particularly vigilant about three types of risks:

1. Use high leverage with caution: In markets with low liquidity (such as low market cap tokens), avoid using leverage greater than 10 times to prevent instant liquidation.

2. Monitor large on-chain flows: Use tools like Lookonchain and Nansen to track Whale address fund movements in real-time, avoiding potential manipulation targets;

3. Hedging liquidity mining risks: When participating in liquidity pools such as HLP, it is necessary to configure hedged positions or set stop-loss thresholds to prevent the collapse of the pool during extreme market conditions.

[Conclusion]

Whale manipulation and liquidity crises have become the core pain points of DeFi derivatives trading. Although technology-driven exchanges like Hyperliquid attempt to alleviate shocks through algorithm optimization, insufficient market depth and rampant leverage still put retail investors at a disadvantage. Investors should prioritize high liquidity targets, strengthen on-chain monitoring capabilities, and be wary of the hidden risks behind "high-yield liquidity mining." In the evolution of the cryptocurrency market, risk control awareness remains the first rule of survival.