Hyperliquid Suffers Major Losses Following POPCAT Attack
A recent sophisticated attack on the POPCAT market has resulted in Hyperliquid, a decentralized derivatives platform, incurring losses of approximately $5 million. This incident raises significant concerns about market vulnerabilities and investor sentiment surrounding the HYPE token.
Details of the POPCAT Attack and Financial Fallout
The POPCAT attack occurred on November 12 when a trader executed a series of manipulative transactions, crafting an artificial purchase wall. Analysts indicate that the trader deployed roughly $3 million in USDC from the OKX exchange across 19 distinct wallet addresses. This manipulation led to nearly $30 million in leveraged long positions, inflating the price of POPCAT to over $0.21.
However, once the artificial buy wall collapsed, the price plummeted to $0.13, triggering extensive liquidations. Hyperliquid’s market-making system, the Hyperliquid Provider (HLP), was compelled to absorb these resulting positions due to the inadequate market liquidity. The total losses for HLP were estimated between $4.9 to $5 million.
The remaining long positions were passed to the Hyperliquidity Provider (HLP) to liquidate.
HLP appears to have lost $4.95M closing out the positions. pic.twitter.com/Qfq9jcy4Mz
— Arkham (@arkham) November 12, 2025
The incident brought to light the potential for coordinated capital movements across several wallets to destabilize decentralized platforms. The attack has drawn parallels to previous manipulative activities observed with other tokens, despite Hyperliquid’s efforts to restore normal trading and facilitate deposits and withdrawals.
Market Implications and Investor Sentiment
The POPCAT attack highlights ongoing risks for decentralized exchanges that handle leveraged tokens. While HLP managed to absorb the losses to shield liquidity providers, the event illustrated how thin liquidity and concentrated positions can magnify the effects of market manipulation. Some analysts on Crypto Twitter argue that these attacks might be designed not just for profit but also to tarnish the reputation of decentralized platforms.
On-chain forensic analyses have attempted to connect the wallets implicated in the attack to entities like BTX Capital, although these claims remain unproven. In response to the situation, Hyperliquid temporarily paused its Arbitrum bridge to mitigate further destabilization. Nevertheless, the incident is likely to impact investor sentiment, particularly as demand for the HYPE token has weakened, evidenced by a notable decline in open interest for futures contracts.
Price Reactions of the HYPE Token
Despite the financial fallout from the attack, the HYPE token has demonstrated a measure of resilience. Following the resolution of the attack, its price slightly rebounded from $37.77 to $39.39, indicating that some investor confidence remains. However, as of this writing, the token has settled around $38.09, suggesting a cautious outlook moving forward.
Technical indicators point to a bearish sentiment, with HYPE trading below its 200-day exponential moving average just under $39, and failing to surpass 50 and 100-day EMAs around $43. Momentum indicators such as MACD and RSI indicate ongoing selling pressure, with analysts warning that a decisive break below the $35 support level could trigger further declines towards the $30 mark.
Hyperliquid Price Chart | Source: CoinMarketCap
