The Hyperliquid decentralized exchange (DEX) ecosystem faced a significant test on March 12, 2025, after its liquidity pool, HLP, suffered a $4 million loss. The incident sent the HYPE coin price tumbling to a low of $12.13 on March 13, rattling investor confidence in the Hyperliquid coin.
However, the Hyperliquid token price has staged a notable recovery, climbing to $13.46, buoyed by the exchange’s swift response.
The Hyperliquid DEX has announced it would hike margin requirements for traders to 20% starting March 15 to bolster risk management and restore faith in the Hyperliquid ecosystem.
This has sparked renewed interest among those who would like to buy the HYPE coin dip, seeing that the Hyperliquid crypto price is steadily rising from the ashes.
The $4M Hyperliquid DEX liquidity pool loss
The $4 million loss at Hyperliquid DEX on March 12, 2025, stemmed from a trader wielding 50x leverage to turn a $10 million investment into a $300 million ETH long position.
Identified by wallet address 0xf3f4, the trader withdrew $17.09 million in collateral after securing an $8 million unrealized profit, triggering an automatic liquidation of the remaining 160,000 ETH.
TRADER LEAVES HYPERLIQUID WITH $4M OF BAD DEBT
Trader 0xf3F longed $300M worth of ETH this morning and subsequently removed all margin from his DEX account.
This forced the Hyperliquid LP Vault to take over and liquidate his position, causing the HLP Vault to incur $4M in…
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The Hyperliquid liquidity pool (HLP) absorbed the position at $1,915 per ETH, resulting in a $4 million deficit.
Notably, this incident, described by auditors Three Sigma as a “brutal game of liquidity mechanics,” was not an exploit but a predictable outcome of the Hyperliquid app’s design under extreme conditions.
Regarding commentary and questions on the 0xf3f4 user’s ETH long:
To be clear: There was no protocol exploit or hack.
This user had unrealized PNL, withdrew, which lowered their margin, and was liquidated. They ended with ~$1.8M in PNL. HLP lost ~$4M over the past 24h. HLP’s…
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The fallout was immediate: the Hyperliquid token price dropped 8.5%, hitting $12.13 on March 13, and the platform saw a $166 million net outflow, shrinking its total value locked (TVL) from $423.7 million to approximately $340 million, according to DefiLlama.
Despite the fallout from the loss, Hyperliquid’s leadership emphasized that the Hyperliquid DEX remained robust, with its HLP vault boasting $60 million in all-time profits.
Hyperliquid raises margin ratio requirement on fund transfers to 20%
In response to the March 12 stress test, Hyperliquid DEX has announced that starting March 15, 2025, at 0:00 UTC, traders must maintain a 20% margin ratio when transferring funds from cross-wallet or isolated margin positions, including withdrawals, perpetual-to-spot transfers, or isolated margin adjustments.
This change, detailed in a March 13 X post, aims to mitigate the “hypothetical market impact” of closing large positions, a vulnerability exposed by the $4 million loss.
To date, Hyperliquid has processed over $1 trillion in trading volume and become the first DEX to rival CEX scale. As volume and open interest continue to grow, there are increasingly large tests for the margining system. Yesterday’s event highlighted an opportunity to strengthen…
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Notably, the rule does not apply to new cross-margin positions and only affects isolated positions if cross-margin usage exceeds 5x leverage post-transfer.
This hike in margin requirements complements Hyperliquid’s earlier decision to lower maximum leverage—Bitcoin to 40x and Ethereum to 25x—enhancing collateral buffers for the Hyperliquid bridge and trading operations.
The platform, known for its zero Hyperliquid fees and fully on-chain order book via the Hyperliquid API, positions this adjustment as a step toward a “performant, transparent, and resilient” environment.
Bybit CEO Ben Zhou praised the move but suggested a dynamic leverage system could further protect the Hyperliquid EVM-compatible ecosystem, though he noted users might still seek high leverage via multiple accounts.
Folks are asking me for my take on Hyperliquid Whale massive ETH position liquidation. To me, this ultimately leads to the discussion on Leverage, DEX vs CEX capabilities to offer low or high leverage. Hear me out:
Essentially what happened was a whale used Hyperliquid…
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For now, Hyperliquid’s proactive stance has bolstered confidence in the Hyperliquid faucet and testnet communities, driving interest in the HYPE coin price.
Hype coin price target
Following today’s recovery, the HYPE coin price today stands at $13.46, up 8.5% from its 24-hour low of $12.14, reflecting a promising rebound for the Hyperliquid crypto price.
Technical indicators suggest the Hyperliquid price target could hinge on key levels.
The Relative Strength Index (RSI) on the daily chart has bounced from an oversold reading below 30 to above it, signaling potential bullish momentum for the Hyperliquid coin.
However, confirmation of a bull run requires the Hyperliquid token price to close above the 9-day moving average (MA) at $14.05 and the 21-day MA at $17.50.
Should the HYPE coin price break these MAs, the first major resistance lies at $20—a level that, if surpassed, could ignite a significant breakout for the Hyperliquid price target. Analysts see this as a plausible scenario, given Hyperliquid’s dominance in perpetual futures trading (70% market share per VanEck) and its $4.48 billion market cap.
A move past $20 might propel the Hyperliquid token toward its mid-December 2024 highs near $34.96, offering substantial upside for those looking to buy hype coin now.
Conversely, failure to breach $14.06 or $17.50 could see the bearish trend resume, pushing the Hyperliquid crypto price back toward its recent low of $12.13 or even lower, testing early December 2024 support levels.
With the Hyperliquid app and ecosystem adapting to recent challenges, the HYPE coin price today reflects a critical juncture—balancing recovery momentum against the broader market.
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