Since its ATH, Hyperliquid’s HYPE has lost more than 50% of its value, posting the worst performance of the top 100 cryptocurrencies over 24 hours. How can this setback be explained?
Hyperliquid’s HYPE falls 52% since its ATH
As is often the case when a cryptocurrency monopolizes all the attention, the subsequent fall is all the greater. Hyperliquid’s HYPE is another example of this, with a drop of more than 52% since its all-time high (ATH) on September 18:
In a report on Hyperliquid last August, we warned about the fear of missing out (FOMO) syndrome, when HYPE seemed to be on everyone’s lips, especially on X. Admittedly, the asset has still gained 50% since our warning, which is a very respectable performance, but only investors who had the composure to take their profits at the right time will have been able to benefit from it.
At the time of writing, HYPE is trading at $28.15, down 6.2% over the last 24 hours, which is the worst daily performance among the top 100 cryptocurrencies.
On X, our analyst Theo Zananiri highlighted several factors that could explain the token’s current poor performance.
Between October and November, for example, open interest on Hyperliquid fell by 29%, which, in addition to a decline in activity due to the current ecosystem context, may also reveal a greater distribution of market share among decentralized perpetual exchanges (DEXs). Where Hyperliquid monopolized 86% of open interest in September, this market share fell to 54% in November, with Aster and Lighter now accounting for 18% and 12% respectively.
In addition, there has been a liquidity outflow of $1.3 billion over the last three months, including $405.4 million over the past month. Some of this capital has been redirected to safer sources of return, such as Arbitrum’s incentive campaign.
On the other hand, HYPE inflation also began in November, with approximately 10 million tokens unlocked monthly for “Core Contributors,” which could create selling pressure on the asset.
Beyond HYPE alone, it will be necessary to be particularly vigilant with regard to altcoins, in the event that the bear market has indeed begun. And for good reason, as declines in these assets are generally much more pronounced than in BTC.
