I’ve been watching the crypto space for years, and few things grab my attention quite like a high-flying token suddenly showing cracks. Right now, Hyperliquid’s native token, HYPE, is testing the patience of holders. After an impressive run that saw it climb to impressive heights last year, the price has taken a noticeable hit. We’re talking about a roughly 25% drop from its peak, and the charts are flashing some concerning signals. Is this just another healthy correction in a volatile market, or are we staring down the barrel of a more serious crash?
Let’s be honest—crypto rarely moves in straight lines. But when technical indicators align with weakening fundamentals, it’s hard to ignore the red flags. In this deep dive, I’ll walk you through what’s happening with HYPE, why the momentum has shifted, and what might come next. Whether you’re a trader eyeing short opportunities or a long-term believer hoping for a rebound, understanding the full picture is crucial.
Understanding the Current Pressure on Hyperliquid
Hyperliquid has built a reputation as one of the go-to platforms for perpetual futures trading in the decentralized space. Its appeal lies in fast execution, high leverage options, and a growing ecosystem that attracts both retail and institutional players. But even strong projects aren’t immune to market cycles. Lately, HYPE has struggled to maintain upward momentum.
The token recently dipped to around $28.50 before bouncing back a bit to trade near $30. That’s still a significant retreat from earlier highs above $37. What stands out most isn’t just the price action—it’s the combination of factors weighing it down. Broader market weakness, particularly in Bitcoin, has spilled over into altcoins. When the king of crypto stumbles, everything else feels the pain.
But HYPE’s troubles seem more specific. Network activity has cooled noticeably. Trading volumes that once exploded have tapered off, and that’s directly impacting the platform’s revenue generation. Less activity means fewer fees, which in turn reduces the buyback and burn mechanism that many saw as a strong deflationary driver for the token.
Breaking Down the Revenue Slide
One of the most telling metrics right now is the drop in weekly revenue. Reports indicate a sharp 55% decline in recent periods, pushing figures down to around $11-12 million on a weekly basis. That’s a far cry from peak levels when the platform was capturing massive trading flows.
Why does this matter so much? Because a big chunk of that revenue historically went toward repurchasing HYPE from the open market and burning it—reducing supply and theoretically supporting price. With less capital flowing into buybacks, the token loses one of its key support pillars. In a market already flooded with sell pressure, that’s like removing a safety net.
I’ve always believed that protocol revenue is one of the best ways to gauge real adoption. When numbers start trending down, it often signals that users are either moving elsewhere or simply trading less. Competition in the perp DEX space is fierce, and any slowdown can snowball quickly.
Revenue isn’t just a number—it’s the lifeblood of token utility in DeFi projects like this.
– A seasoned crypto analyst’s take
Total value locked has also slipped from highs near $4.7 billion to something closer to $4.2-4.5 billion. While still respectable, that contraction hints at reduced confidence or liquidity providers pulling back. In DeFi, TVL tells a story about trust and participation.
The Technical Picture: Bearish Crossover Takes Center Stage
Now let’s shift to the charts, because they’re painting a pretty clear picture. On the daily timeframe, the MACD has confirmed a bearish crossover. For those unfamiliar, that’s when the signal line crosses below the MACD line, often accompanied by expanding red histograms. It screams momentum shifting to the sellers.
This isn’t some minor blip—it’s a classic warning sign that downward pressure is building. Combine that with the price hovering near key Fibonacci levels, and things get even more interesting. The 38.2% retracement from last year’s major swing sits around $28.40. A clean break below that could open the door to much lower targets.
- Immediate support around $28.40 (Fib level)
- Next major zone near $21-23 (previous lows and psychological area)
- Resistance overhead at $32-33 (recent swing highs)
- RSI trending lower in a channel, approaching oversold but not there yet
In my view, the most worrying part is how these technicals align with the fundamentals. When both are pointing south, recoveries tend to be harder and take longer. Traders are watching closely—if we see a decisive break lower, stop-loss cascades could accelerate the move.
Broader Market Context and Its Ripple Effects
You can’t discuss HYPE without touching on Bitcoin. The flagship asset has broken several key psychological levels recently, triggering risk-off behavior across the board. Altcoins, especially those tied to DeFi and derivatives, feel this pain disproportionately.
Investor appetite for high-risk plays diminishes when BTC is weak. Hyperliquid’s success has been tied to explosive trading activity, which thrives in bullish or highly volatile environments. A prolonged cooldown in crypto overall naturally hits platforms like this harder.
Perhaps the most frustrating aspect for holders is the timing. Just when the platform seemed to be hitting its stride with institutional interest and product expansions, external pressures are dominating. It’s a reminder that no project operates in a vacuum.
Potential Scenarios: Crash or Rebound?
So where does this leave us? Let’s map out the realistic paths forward.
Bearish Case – Further Downside Likely
If the bearish momentum holds, a drop below $28.40 seems probable. That could trigger a test of $21 or even lower if panic sets in. Reduced buyback pressure, combined with ongoing token unlocks in some schedules (though recent adjustments have eased this), keeps sellers in control. In a worst-case scenario tied to broader market weakness, sub-$20 isn’t impossible short-term.
Traders betting on this would look for confirmation via lower highs on lower timeframes and continued MACD weakness. Volume spikes on red candles would seal the deal.
Bullish Reversal – Not Out of the Question
On the flip side, if buyers step in aggressively around current levels or the $28 zone, we could see a bounce. A reclaim of $32-33 would invalidate some bearish structure and open the path back toward $37+. This would almost certainly require a broader crypto recovery—think Bitcoin stabilizing and risk appetite returning.
Stronger trading volumes on Hyperliquid itself would help too. If revenue starts ticking higher again, that deflationary mechanism could kick back in and provide real support. I’ve seen tokens turn on a dime when fundamentals realign with technicals.
- Watch for stabilization in Bitcoin price action first
- Monitor daily closes around key Fib levels
- Track any uptick in platform metrics like TVL or fees
- Look for MACD to flatten or reverse if bulls want to regain control
Patience is key here. Rushing to call a bottom or a crash rarely pays off in crypto.
What Traders and Holders Should Consider
Whether you’re leveraged trading perps on the platform or simply holding HYPE, risk management is everything right now. The volatility is real, and liquidations can cascade quickly in derivatives markets.
For long-term believers, this could be a period to accumulate if you truly believe in the protocol’s edge. Hyperliquid has carved out a dominant position in decentralized perps—overtaking some centralized players in volume at times. That kind of market share doesn’t disappear overnight.
But short-term, caution seems prudent. The bearish crossover isn’t just noise; it’s a signal that sellers are in charge for now. Layer on declining revenue, and the path of least resistance appears lower until proven otherwise.
At the end of the day, crypto rewards those who stay informed and adaptable. HYPE’s story is far from over—whether it crashes further or stages an impressive comeback depends on a mix of market forces, protocol performance, and sentiment shifts. I’ll be watching closely, and I suggest you do the same.
What do you think—crash incoming or buying opportunity? The charts are speaking, but the market always has the final word.
