Hyperliquid trading volume before and after latest liquidation event paints sobering picture for traders
Quick Take
- In the seven-day post-liquidation cascade, daily liquidations on Hyperliquid increased by an average of 70% per day.
- The following is excerpted from The Block’s Data and Insights newsletter.
Following the devastating liquidation event, open interest (OI) on Hyperliquid nearly halved and has yet to meaningfully recover.
Prior to the liquidation event, Hyperliquid OI stood at about $13.8 billion, with more than one-third in altcoins (excluding BTC, ETH, and SOL). The liquidation cascade decimated over $7.4 billion of OI on Hyperliquid alone, with nearly $3 billion from altcoins. A week since the event, OI on the platform slightly increased from the bottom, yet remains far below its pre-cascade levels.
Taking a granular look at the trading volumes on Hyperliquid before and after this latest liquidation event paints an interesting, albeit sobering, picture for traders on the platform.
In the seven days before the liquidation cascade, Hyperliquid averaged about $10 billion in daily trading volume across all trading pairs. Despite open interest dropping over 30%, trading volume in the week after the liquidation event climbed 17%.
This discrepancy indicates increased trading activity from traders, possibly in an effort to "make it all back" as soon as possible, also known as revenge trading. Looking at the platform's daily liquidation figures, it does not seem like this strategy has been going well for most people.
In the seven-day post-liquidation cascade, daily liquidations on Hyperliquid increased by an average of 70% per day, indicating the majority of traders on Hyperliquid failed to "make it all back" and could be in an even worse financial situation right now than they were less than two weeks ago.
Of note, Hyperliquid cofounder Jeff Yan on Oct. 13 criticized some centralized exchanges for underreporting liquidation data after market wipeout by as much as 100 times. That same day, the platform launched an upgrade to enable the permissionless deployment of perpetual futures markets.
This is an excerpt from The Block's Data & Insights newsletter. Dig into the numbers making up the industry's most thought-provoking trends.
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