Hyperliquid Traders Stuck in Positions as API Outage Sparks Market Chaos
- What Happened During the Hyperliquid API Crash?
- How Did the Outage Impact Crypto Markets?
- Who Took the Biggest Hits?
- What’s Next for Hyperliquid?
- FAQ: Hyperliquid Outage Fallout
On July 29, 2025, Hyperliquid’s API suffered a critical 27-minute outage, leaving traders unable to close positions or manage risk. With over 500,000 accounts affected and $538 million in locked funds, the incident reignited debates about decentralized exchange resilience. As Bitcoin wobbled near $118K, traders like James Wynn faced partial liquidations, while the Hyperliquid team scrambled to restore services. Here’s what went down—and why it matters.
What Happened During the Hyperliquid API Crash?
At 14:20 UTC, Hyperliquid’s API suddenly went dark, freezing all trading activity on its perpetual futures DEX. Traders reported being unable to close positions, add margin, or cancel orders—some even lost access to stop-loss protections. The outage persisted until 14:47 UTC, coinciding with negative funding rates that fueled speculation about a coordinated attack. "I panicked when my Pepe long started liquidating with no way to intervene," admitted one Discord user. Despite Hyperliquid’s blockchain continuing to produce blocks, the front-end failure left traders hostage to market moves.
How Did the Outage Impact Crypto Markets?
The timing couldn’t have been worse: bitcoin was testing $118,000 support when systems failed. Data from TradingView shows Hyperliquid’s native token (HYPE) held at $43.69 during the incident, but perpetual volumes cratered by 68%. The outage also cascaded to lighter DEXs relying on Hyperliquid’s order books. Most critically, over $538 million in net deposits—per DeFi Llama—were temporarily frozen. "This exposes the myth of ‘decentralization’ when a single API can paralyze half a million accounts," remarked BTCC analyst Clara Lin.
Who Took the Biggest Hits?
High-profile casualties emerged, including whale James Wynn’s PEPE position. Blockchain data reveals Wynn suffered $63,000 in unrealized losses and partial liquidations before services resumed. Meanwhile, traders reported bizarre glitches—one mobile user’s app displayed "404: Trading Not Found" errors. The incident drew uncomfortable parallels to FTX’s pre-collapse trading halts, though Hyperliquid assured users all funds were safe on-chain.
What’s Next for Hyperliquid?
As of July 30, the team hasn’t disclosed the outage’s root cause. Critics highlight lingering concerns:
- Hourly on-chain settlements continued during the outage, but open positions couldn’t adjust to price swings
- No fallback mechanism existed for API failures despite $14.7B in record open interest
- Mobile and desktop interfaces failed simultaneously
CoinMarketCap data shows HYPE trading volume remains 40% below pre-outage levels—a sign traders may be voting with their feet.
FAQ: Hyperliquid Outage Fallout
How long did the Hyperliquid API outage last?
The disruption persisted for 27 minutes between 14:20 and 14:47 UTC on July 29, 2025.
Were funds at risk during the outage?
While Hyperliquid confirmed all assets remained secure on-chain, the inability to manage positions exposed traders to liquidation risks amid volatile markets.
Has Hyperliquid explained what caused the crash?
As of publication, the team has only acknowledged the "technical incident" without detailing its origin. Speculation ranges from DDoS attacks to infrastructure failures.
