A whale on HyperLiquid used its capital advantage to squeeze the shorts, causing funding rate distortion and significant price volatility
BlockBeats News, November 25th, according to MLM Monitor, a whale deposited 32 million USDC into HyperLiquid, used TWAP to sweep the spot market for HYPE, with the intention to squeeze large short positions (about 5% away from the liquidation price). Within 15 minutes, they bought $14.5 million worth of HYPE. At the same time, they also placed $7.05 million worth of short positions in the $34.5 to $36 range, trying to entice the shorts to be squeezed.
Subsequently, traders opened shorts against his buy orders, causing the funding rate to briefly rise above -800% and prompting a spot premium of $0.4. The whale then market sold 100,000 HYPE (worth $3.3 million), causing the price of HYPE to drop by 4% within seconds.
The squeezed short position now only holds 727,000 HYPE ($24 million), previously at a scale of 2.1 million HYPE ($67.1 million).
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