A whale made a short-term large HYPE spot purchase on HyperLiquid in an attempt to squeeze the shorts, causing significant funding rate distortion and a sharp price fluctuation.

On November 25th, according to MLM Monitoring, a whale deposited 32 million USDC into HyperLiquid. It used the Time-Weighted Average Price (TWAP) to sweep the spot market for HYPE with the intention of squeezing large short positions (about 5% from the liquidation price). Within 15 minutes, the whale bought HYPE worth $14.5 million. At the same time, it also placed short orders worth $7.05 million in the range of $34.5 to $36, trying to induce the short positions to be squeezed. Subsequently, traders shorted against its buy orders, resulting in the funding rate briefly surging to over -800% and triggering a spot premium of $0.4. The whale then sold 100,000 HYPE (worth $3.3 million) in the market, causing the price of HYPE to drop by 4% in a few seconds. The squeezed short positions now hold only 727,000 HYPE ($24 million), which is less than their previous position of 2.1 million HYPE ($67.1 million).