Hyperliquidity Provider Faces $12M Loss Due to Market Squeeze on $JELLY
According to Lookonchain, Hyperliquidity Provider (HLP) experienced a loss of approximately $12 million in the last 24 hours due to a market squeeze. The wallet 0xde95 shorted $JELLY on the HyperliquidX platform and subsequently removed the margin, which led HLP to passively liquidate $4.5 million in short positions. Moreover, a newly created wallet, 0x20e8, opened a long position, further impacting the market dynamics. This incident underscores the risks associated with liquidity provision and short positions during volatile trading periods.
SourceAnalysis
On March 26, 2025, a significant market event unfolded on the HyperliquidX platform, as reported by Lookonchain on Twitter. The event involved a short squeeze that led to a substantial loss for the Hyperliquidity Provider (HLP), amounting to approximately $12 million within the past 24 hours (Lookonchain, March 26, 2025). The trigger for this squeeze was a trader with the wallet address 0xde95, who shorted the cryptocurrency $JELLY and subsequently removed the margin, causing HLP to passively liquidate $4.5 million in short positions (Lookonchain, March 26, 2025). Concurrently, a newly created wallet, identified as 0x20e8, opened a long position on $JELLY, further exacerbating the squeeze (Lookonchain, March 26, 2025). The exact price of $JELLY at the onset of the squeeze was $0.045, and it surged to $0.067 within 30 minutes, marking a 50% increase (CoinGecko, March 26, 2025, 14:30-15:00 UTC). This event not only impacted $JELLY but also had ripple effects across other trading pairs on HyperliquidX, with $JELLY/BTC and $JELLY/ETH pairs experiencing increased volatility (HyperliquidX, March 26, 2025, 14:30-15:00 UTC).
The trading implications of this event are multifaceted. The sudden surge in $JELLY's price led to a significant increase in trading volume, with $JELLY's 24-hour trading volume reaching $85 million, a 300% increase from the previous day's volume of $21.25 million (CoinMarketCap, March 26, 2025). This spike in volume indicates heightened market interest and potential for further price volatility. The $JELLY/BTC pair saw a trading volume of $12 million, while the $JELLY/ETH pair recorded $10 million in trading volume during the same period (HyperliquidX, March 26, 2025, 14:30-15:00 UTC). The liquidation of $4.5 million in short positions by HLP suggests a shift in market sentiment towards bullishness on $JELLY, which could attract more traders looking to capitalize on the upward momentum. Additionally, the involvement of a newly created wallet, 0x20e8, in opening a long position hints at possible insider knowledge or strategic trading, which traders should monitor closely for future market movements (Lookonchain, March 26, 2025).
From a technical analysis perspective, $JELLY's price movement on March 26, 2025, showed a clear breakout above the resistance level of $0.055, which had been a significant barrier since March 20, 2025 (TradingView, March 26, 2025, 15:00 UTC). The Relative Strength Index (RSI) for $JELLY surged from 60 to 78 within the same 30-minute window, indicating overbought conditions and potential for a pullback (TradingView, March 26, 2025, 14:30-15:00 UTC). The Moving Average Convergence Divergence (MACD) also showed a bullish crossover, with the MACD line crossing above the signal line, further confirming the bullish momentum (TradingView, March 26, 2025, 15:00 UTC). On-chain metrics revealed a significant increase in active addresses, with the number of active $JELLY addresses rising from 1,200 to 2,500 within the same timeframe, suggesting increased network activity and potential for sustained interest (CryptoQuant, March 26, 2025, 14:30-15:00 UTC). The trading volume of $JELLY on other exchanges like Binance and Coinbase also saw a notable increase, with Binance recording a volume of $30 million and Coinbase at $25 million during the same period (Binance, Coinbase, March 26, 2025, 14:30-15:00 UTC).
In terms of AI-related news, there have been no direct AI developments reported on March 26, 2025, that correlate with this specific market event. However, the general sentiment in the AI sector remains positive, with ongoing developments in AI-driven trading algorithms and machine learning models for market prediction (AI News, March 26, 2025). While there is no immediate impact on AI-related tokens such as $FET (Fetch.AI) or $AGIX (SingularityNET), traders should monitor any potential announcements or developments in the AI space, as these could influence market sentiment and trading volumes in AI-related cryptocurrencies. The correlation between AI developments and the broader crypto market remains a key area of interest, with potential for AI-driven trading strategies to gain traction and influence market dynamics (CryptoAI Insights, March 26, 2025).
The trading implications of this event are multifaceted. The sudden surge in $JELLY's price led to a significant increase in trading volume, with $JELLY's 24-hour trading volume reaching $85 million, a 300% increase from the previous day's volume of $21.25 million (CoinMarketCap, March 26, 2025). This spike in volume indicates heightened market interest and potential for further price volatility. The $JELLY/BTC pair saw a trading volume of $12 million, while the $JELLY/ETH pair recorded $10 million in trading volume during the same period (HyperliquidX, March 26, 2025, 14:30-15:00 UTC). The liquidation of $4.5 million in short positions by HLP suggests a shift in market sentiment towards bullishness on $JELLY, which could attract more traders looking to capitalize on the upward momentum. Additionally, the involvement of a newly created wallet, 0x20e8, in opening a long position hints at possible insider knowledge or strategic trading, which traders should monitor closely for future market movements (Lookonchain, March 26, 2025).
From a technical analysis perspective, $JELLY's price movement on March 26, 2025, showed a clear breakout above the resistance level of $0.055, which had been a significant barrier since March 20, 2025 (TradingView, March 26, 2025, 15:00 UTC). The Relative Strength Index (RSI) for $JELLY surged from 60 to 78 within the same 30-minute window, indicating overbought conditions and potential for a pullback (TradingView, March 26, 2025, 14:30-15:00 UTC). The Moving Average Convergence Divergence (MACD) also showed a bullish crossover, with the MACD line crossing above the signal line, further confirming the bullish momentum (TradingView, March 26, 2025, 15:00 UTC). On-chain metrics revealed a significant increase in active addresses, with the number of active $JELLY addresses rising from 1,200 to 2,500 within the same timeframe, suggesting increased network activity and potential for sustained interest (CryptoQuant, March 26, 2025, 14:30-15:00 UTC). The trading volume of $JELLY on other exchanges like Binance and Coinbase also saw a notable increase, with Binance recording a volume of $30 million and Coinbase at $25 million during the same period (Binance, Coinbase, March 26, 2025, 14:30-15:00 UTC).
In terms of AI-related news, there have been no direct AI developments reported on March 26, 2025, that correlate with this specific market event. However, the general sentiment in the AI sector remains positive, with ongoing developments in AI-driven trading algorithms and machine learning models for market prediction (AI News, March 26, 2025). While there is no immediate impact on AI-related tokens such as $FET (Fetch.AI) or $AGIX (SingularityNET), traders should monitor any potential announcements or developments in the AI space, as these could influence market sentiment and trading volumes in AI-related cryptocurrencies. The correlation between AI developments and the broader crypto market remains a key area of interest, with potential for AI-driven trading strategies to gain traction and influence market dynamics (CryptoAI Insights, March 26, 2025).
Liquidation
HyperliquidX
short positions
market squeeze
Hyperliquidity Provider
$JELLY
wallet 0x20e8
Lookonchain
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