Another drama unfolds on Hyperliquid as a whale exploits JELLYJELLY, executing a $6M short, self-liquidating, and forcing the HLP vault to absorb a massive position—leading to over $10M in unrealized losses.
In response, Hyperliquid intervened, delisted JELLYJELLY, and force-closed the trade at a favorable price—turning a potential disaster into a $700K profit. Looks like whales are on a mission to wreck Hyperliquid.
Key Observations:
34% Dump:
This sharp decline suggests either a massive sell-off, forced liquidations, or an intentional push to trigger stop losses/liquidations of long positions.
Given the low liquidity of JELLYJELLY, a whale could have dumped tokens aggressively to create panic.
484% Pump Right After:
This kind of rapid recovery is abnormal unless there was an external force, likely a whale strategically opening a long position on another exchange before triggering the move.
The market rebounded instantly, meaning someone had pre-planned buy orders or was forcing short liquidations.
Exchange Arbitrage Play:
If the whale opened a long on another exchange, they would profit massively when the price recovered.
The forced liquidations on Hyperliquid’s HLP vault would absorb the losses, essentially making it a risk-free arbitrage play for the whale.
Impact on Retail Traders:
Retail users got trapped in both directions. Those who panic-sold at the bottom got wrecked, while shorts who jumped in late got squeezed in the pump.
Final Takeaway:
This was likely a calculated liquidation hunt, where a whale used cross-exchange positioning to profit while forcing Hyperliquid’s system to absorb the impact. The delisting of JELLYJELLY suggests the platform recognized the manipulation but reacted too late
#jellyjelly #Hyperliquid
