Perpetual contracts on Hyperliquid linked to South Korean chipmaker SK Hynix experienced sharp fluctuations shortly before and after the Asian market opened. Data shows that the contract plunged by about 20% within one minute before quickly recovering most of its losses.
A sharp drop followed by a rebound within one minute
According to Hyperliquid data, between 23:00 and 23:01 UTC, the price of this contract briefly fell to $900. Just one minute later, the price rebounded above $1000, subsequently settling around $1092.
The contract tracks the performance of SK Hynix-related assets and is denominated and settled in the US dollar stablecoin USDC. SK Hynix's American Depositary Receipts (ADRs) were just listed on Nasdaq earlier this month.
Low liquidity periods tend to amplify volatility.
Before and after this flash crash, SK Hynix's stock price in its home market of South Korea also came under pressure. CoinDesk reported that such rapid declines are not uncommon on cryptocurrency trading platforms, especially during the period after the US stock market closes and before and after the Asian market opens, when market depth is usually weaker.
When liquidity is low, trading platforms have a reduced ability to absorb large buy and sell orders, making prices more susceptible to being driven up or down by short-term order fluctuations. This same situation can occur with on-chain perpetual contracts linked to traditional financial assets.
Hyperliquid is handling more traditional asset transactions.
Hyperliquid, a decentralized exchange known for its perpetual contract trading, has attracted more users looking to trade traditional asset exposures in recent months. The report notes that this demand has increased since the outbreak of the Iran-Iraq conflict in late February.
SK Hynix is one of the world's leading suppliers of high-bandwidth memory chips, and its products are widely used in Nvidia's AI processors. The company's stock price has continued to decline this month, falling nearly 48% from its high on June 26.
This brief flash crash did not change the fact that the contract rebounded quickly, but it also shows once again that in the on-chain derivatives market, liquidity changes during off-peak trading hours can still lead to significant price distortions.
