Why did Popcat Pump 2x, only to dump today?

The Popcat Pump became one of the wildest stories in crypto this week. The Solana-based meme coin surged nearly 2x overnight, only to crash within hours. What looked like a strong rally soon turned into chaos, leaving traders liquidated and one platform nursing millions in losses.

How the Popcat Pump Started

The surge began when an unknown trader withdrew around $3 million USDC from OKX, according to on-chain data shared by Arkham Intelligence. The trader split the funds across 19 wallets and deposited them on the decentralized exchange Hyperliquid.

From there, he opened multiple long positions on POPCAT, using up to 5x leverage. The total exposure ballooned to nearly $30 million, briefly pushing POPCAT’s price above $0.21, a massive spike from its earlier range.

The coordinated activity sparked social media hype. Many believed a new bullish wave was starting. But in reality, this was the setup for one of the fastest collapses in meme coin history.

The Fake $20 Million Buy Wall

Things escalated when the same trader placed a fake $20 million buy wall at $0.21. This made it seem like a huge demand was waiting to absorb sells, convincing other traders to go long.

Moments later, the trader canceled the buy wall, pulling the floor out from under the market. The illusion of liquidity vanished, and within seconds, POPCAT’s price nosedived over 30%.

As prices fell, Hyperliquid’s liquidation system lagged, unable to close positions fast enough. This delay created bad debt, losses that exceeded collateral levels, which had to be covered by the platform’s Hyperliquidity Provider (HLP) vault.

$4.9 Million in Losses for Hyperliquid

According to Hyperliquid’s public dashboard, the HLP vault took a $4.9 million hit. The data shows a sudden drop in the vault’s PNL curve, matching the timeline of the Popcat crash.

The 19 accounts were liquidated for a combined $25.5 million in POPCAT, losing almost all collateral in minutes. Analysts at Lookonchain and Arkham confirmed the chain of events, with both reporting that the trader’s entire stake was wiped out.

Was It a Stress Test or Market Manipulation?

Crypto analysts are debating whether this was a calculated attack or a “stress test” of Hyperliquid’s system. Some pointed to the precision of the trades, comparing it to earlier incidents like JellyJelly 2.0, which also exploited high leverage and liquidity delays.

A few community members even speculated about larger players testing DeFi infrastructure limits. However, others dismissed the idea as a conspiracy, suggesting it was simply a reckless trader experimenting with leverage.

Regardless of intent, the Popcat Pump exposed vulnerabilities in how decentralized platforms handle high-leverage meme tokens. Hyperliquid has since stabilized operations, but the incident adds to growing scrutiny over risk controls in DeFi.

Market Reaction and Lessons Learned

At the time of writing, POPCAT is trading around $0.12, down roughly 20% in 24 hours. The token remains volatile as traders attempt to recover from liquidations.

For seasoned traders, this event highlights why meme coins can be unpredictable and why over-leveraging in thinly traded markets is dangerous.

For those exploring how traders turn volatility into opportunity, check out our breakdown of The Crypto Millionaire Blueprint.

Meanwhile, Hyperliquid’s Arbitrum bridge briefly paused during the liquidation wave but was restored within hours. Deposits and withdrawals remain unaffected.

Final Thoughts

The Popcat Pump wasn’t just another meme coin moment. It revealed how coordinated actions, even from a single trader, can shake entire DeFi markets.

While Hyperliquid absorbed the damage this time, questions remain about whether DeFi platforms can withstand similar stress events in the future. Until leverage limits tighten and real-time monitoring improves, traders might want to tread carefully in the meme token arena.

Disclaimer:

This article is for informational purposes only and should not be considered financial advice. Cryptocurrency investments are volatile and involve significant risk. Always conduct your own research before investing.