Traders on Hyperliquid, a decentralized exchange, suffered widespread liquidations on Wednesday after benchmark oil prices recorded their sharpest single-day decline since the start of the COVID-19 pandemic in 2020. Data from provider Allium shows that close to 3,000 users speculating on Brent and WTI crude oil had their positions forcibly closed within a 24-hour period due to adverse price movements. By comparison, approximately 2,380 users were liquidated while trading Bitcoin perpetual futures during the same window.
On a notional basis, Hyperliquid users lost $79.7 million in leveraged positions tied to Brent and WTI crude oil perpetual futures. Bitcoin was the only other asset on the platform to generate comparable losses, with liquidations reaching $107 million. According to the Wall Street Journal, a daily decline of greater than 14% in crude oil prices has occurred only four other times since 1989.
Brent crude oil futures for June delivery fell 12.6% on Wednesday to $94.5 per barrel, according to Trading Economics data. WTI crude oil futures dropped 15% to $96 per barrel. The sell-off was triggered in part by U.S. President Donald Trump‘s declaration that Iran had agreed to a two-week ceasefire, easing concerns about supply disruptions in the region.
The president also indicated that a ten-point peace plan proposed by Iran serves as a workable basis for negotiations. In recent weeks, he has suggested that the Strait of Hormuz, through which approximately 20% of the world’s oil flows, could be reopened given additional time. The previous wave of oil-related liquidations on Hyperliquid had similarly followed a presidential announcement, at that time involving a five-day pause on military strikes against Iran’s energy infrastructure, alongside an explosion near an oil refinery in Port Arthur, Texas.
Hyperliquid’s user base originally gravitated toward cryptocurrency trading, but an upgrade in October expanded the platform to include real-world assets. Since then, users have increasingly placed leveraged bets on commodities. Earlier this year, in January, a round of liquidations struck the platform when precious metals including gold and silver retreated from record highs.
On Myriad, a prediction market owned by Dastan, the parent company of Decrypt, traders revised their outlook on WTI crude oil futures following the price drop. The probability that WTI futures would reach $120 before falling to $55 dropped to 63%, down from 89% the previous day. Separately, traders on the platform assigned a 74% probability that the seven-day moving average of ships transiting the Strait of Hormuz would rise above 15 before May, a significant shift from less than a week earlier when sentiment on that question was evenly split.
Originally reported by Decrypt.
