This is polyp retraction and caused by stress. Euphyllia requires Stable tank conditions, and is intolerant to major swings in water quality, and is sensitive to almost any level of copper in the water. Since they are a large polyp stony coral, calcium and alkalinity are two very important water parameters that will affect the growth of your coral. This coral will start to die off if the calcium levels are too low. A calcium level of about 400 ppm is just right.
This coral species isn’t terribly picky when it comes to the proper placement in your tank. The trick would really be just to avoid the extremes. Avoid extremely bright locations or areas of very high current, and avoid areas that are too dark or with currents that are too low. Fast currents risk damaging the soft, fleshy polyps (and getting an infection). Bright lights will cause bleaching. Insufficient lighting will cause the poor coral to wither away and starve to death.
Hammer corals only require a moderate amount of light for photosynthesis and can grow well in the intermediate regions of your tank. Just about any reef LED lighting should be sufficient for most tanks. Reduce white light intensity and get it off the sand bed which sand can irritate it.
The polyps should sway in the current, but not sustain so much pressure they are constantly bent over their skeleton. Too much flow will tear the polyps (worst case) and cause the polyps do not extend in the first place (best case). So, don’t give them too much flow.
Liquid this and that will not fix this.
