Leverage Bets Backfire as XPL's Premarket Manipulation Spawns $17M Liquidations

Buddy Huang Li, a prominent figure in the cryptocurrency trading community, has intensified his long position in the XPL token, a premarket asset linked to the Plasma stablecoin project. According to on-chain analyst Ai Yi, Huang opened a 10x leveraged long position in XPL worth $2.333 million on September 26, holding 1.9 million tokens at an entry price of $1.31. This move followed an earlier increase in his 5x leveraged position to $13.3 million (8.8 million tokens) at an average entry price of $1.55, as reported by LookOnChaintitle4^[4]. However, both positions are currently facing significant unrealized losses, with the 5x position down $381,000 and the 10x position incurring a $171,000 losstitle1^[1]title2^[2].

The XPL token has experienced extreme volatility, driven by manipulative trading activity earlier in August. A coordinated effort by four large addresses, including one allegedly linked to TRON founder Justin Sun, triggered a 200% surge in XPL’s premarket price on Hyperliquid, peaking at $1.80. This manipulation led to over $17 million in liquidations across the platform, as traders were caught in a sharp correctiontitle3^[3]. The incident prompted Hyperliquid to implement new protective measures, including price limits tied to an eight-hour EMA and integration of external market data to curb manipulationtitle3^[3].

Huang’s exposure to XPL is part of a broader portfolio of leveraged positions, which include ETH, PUMP, and HYPE. As of September 26, his total unrealized losses across these assets reached $21.468 million, with cumulative losses over the preceding week amounting to $32.89 milliontitle2^[2]. Analysts note that such high-leverage strategies amplify risk, particularly in markets prone to rapid price swings. The Plasma project, which underpins XPL, raised $373 million in a public token sale in July but has yet to launch its stablecoin, adding uncertainty to the asset’s long-term prospectstitle3^[3].

The recent volatility underscores the challenges faced by traders in premarket environments, where liquidity is often thin and susceptible to manipulation. Hyperliquid’s response, including algorithmic adjustments to delay reactions to sudden price spikes, aims to stabilize trading conditions. However, critics argue that repeated incidents like the XPL manipulation could erode trust in the platform’s premarket modeltitle3^[3].

Buddy Huang Li’s continued betting on XPL reflects a high-risk, high-reward approach amid a volatile market. While his positions highlight the potential for rapid gains, they also illustrate the dangers of leveraging in environments where market integrity is under pressure. As the Plasma project progresses, the outcome of XPL’s token launch and its integration into broader ecosystems may provide further clarity on the asset’s viabilitytitle3^[3].