It’s been a rough start to the year for many crypto projects, but few have felt the sting quite like Hyperliquid’s native token, HYPE. After hitting impressive highs last year, the price has steadily declined through 2026, leaving holders wondering if there’s any real path back to those glory days. Then came the announcement that caught everyone’s attention: a new advocacy group setting up shop right in the heart of Washington, D.C.
Could this bold move into policy and regulation actually help turn the tide? Or is it just another shiny distraction while bigger problems—like upcoming token unlocks and shrinking network activity—continue to weigh things down? I’ve been following these developments closely, and honestly, it’s a fascinating mix of hope and hard reality.
A Fresh Catalyst Emerges in Washington
When the news broke about the launch of this dedicated policy center focused on decentralized finance, the immediate market reaction was positive. HYPE jumped roughly 6% in short order, a welcome sight after months of mostly downward pressure. The initiative isn’t just talk; it’s backed by a serious commitment from the project’s foundation—millions worth of tokens allocated to fund research, lobbying, and education efforts aimed at bringing clarity to on-chain derivatives and perpetual futures trading.
In my view, this kind of proactive step into the regulatory arena is long overdue for many DeFi projects. The space has grown so fast that lawmakers often don’t fully grasp how these systems work or why rigid old-school rules don’t fit. By positioning itself as a thoughtful voice rather than just another lobbyist, Hyperliquid could help shape frameworks that actually make sense for decentralized platforms. That kind of influence might encourage more institutional participation down the line, which is exactly what the sector needs to mature.
Regulatory clarity isn’t just nice to have—it’s essential for long-term adoption in a space that’s often misunderstood by traditional finance watchers.
– A longtime DeFi observer
Of course, translating policy wins into token price gains isn’t automatic. It takes time, and the market tends to be impatient. Still, the visibility alone could draw fresh eyes to the platform, especially if it leads to meaningful conversations on Capitol Hill.
The Fundamentals Tell a Different Story
Despite the short-term pop, the underlying numbers paint a more cautious picture. Total value locked on the network has slipped noticeably in recent weeks, dropping from peaks earlier in the year. At the same time, revenue from protocol fees has taken a serious hit—down over 50% in a short period. When people are less engaged and less capital is at work, it’s tough for any token to sustain upward momentum.
I’ve seen this pattern before in other projects: flashy announcements can spark rallies, but without strong on-chain usage, they tend to fade. Right now, the ecosystem seems to be in a consolidation phase, perhaps waiting for broader market conditions to improve or for new features to reignite interest. Whatever the cause, these metrics remind us that advocacy alone won’t fix everything if the core product isn’t humming.
- Declining TVL signals reduced capital commitment
- Revenue drop suggests lower trading activity
- Engagement metrics need a boost for sustainable growth
It’s not all doom and gloom, though. Hyperliquid still commands a significant share of the decentralized perpetuals market, and any uptick in overall crypto sentiment could quickly reflect in higher volumes here. But ignoring these weaknesses would be a mistake.
The Looming Shadow of Token Unlocks
Perhaps the biggest near-term challenge is the scheduled release of millions of additional HYPE tokens in early March. This unlock represents a meaningful portion of the circulating supply, and historically, such events introduce selling pressure unless there’s overwhelming demand to absorb it.
At current prices, we’re talking hundreds of millions in potential liquidity hitting the market. If buyers aren’t ready and willing, that could easily push prices lower—potentially testing supports much deeper than where we are now. I’ve watched similar unlocks play out in other projects, and the outcome often depends on sentiment at the exact moment. Right now, sentiment is mixed at best.
One thing that might help is if the advocacy push gains real traction in the weeks leading up to the event. Positive headlines from D.C. could offset some of the mechanical selling. But relying on that feels risky.
Technical Picture: Bears Still in Control?
Zooming out to the charts, HYPE has been stuck below a clear descending resistance line since the start of February. Every time it tries to rally, sellers step in, capping upside. It’s classic bear market behavior—lower highs and persistent pressure from above.
Momentum indicators aren’t exactly screaming bullish either. The Aroon down remains elevated, pointing to strong selling pressure, while RSI has trended lower without much conviction to reverse. It’s not hopeless, but bulls need to prove they can break and hold key levels before anyone gets too excited.
Support around the 38.2% Fibonacci retracement has held so far, but a clean break below could open the door to deeper corrections. On the flip side, a decisive move above that trendline would shift the narrative dramatically.
Broader Market Context Matters
It’s impossible to talk about HYPE without acknowledging what’s happening in the wider crypto space. Bitcoin’s struggles to hold key supports have dragged most altcoins lower, creating a risk-off environment where speculative assets suffer most. Until the king coin finds its footing, recoveries in projects like Hyperliquid tend to be shallow and short-lived.
That said, DeFi-specific narratives can sometimes decouple. If the advocacy effort leads to tangible progress—say, clearer rules that invite more institutional flow—Hyperliquid could outperform the broader market. It’s a big “if,” but the potential is there.
What Could Drive a Real Recovery?
For HYPE to stage a meaningful comeback, several things need to align. First, on-chain activity must rebound—higher TVL, more trades, stronger fee generation. Second, the policy center needs to deliver early wins, even small ones, to build credibility and attract attention. Third, the token unlock needs to be absorbed without major downside, which requires solid demand.
- Renewed user engagement and TVL growth
- Positive regulatory developments from advocacy
- Successful management of supply events
- Supportive macro conditions in crypto
- Technical breakout above resistance
Any one of these could spark momentum, but all of them together would be powerful. In my experience, projects that combine strong fundamentals with smart positioning tend to weather storms better than those relying on hype alone.
Longer-Term Perspective: Reasons for Optimism
Despite the current headwinds, I remain cautiously optimistic about Hyperliquid’s place in the ecosystem. It has carved out a dominant position in decentralized perpetuals, a sector with real utility and growing demand. The tech is solid, execution has been impressive, and now they’re taking steps to address one of the biggest barriers—regulatory uncertainty.
If they can navigate the short-term risks successfully, the setup for 2026 and beyond looks intriguing. DeFi isn’t going anywhere, and platforms that lead on infrastructure and policy could capture outsized gains when the next bull cycle arrives. HYPE might not moon tomorrow, but dismissing it entirely feels premature.
Of course, this isn’t financial advice—just one person’s take based on watching these markets for years. Crypto remains volatile, and outcomes are never guaranteed. But that’s part of what makes it exciting, right?
So there you have it: a policy push that sparked hope, countered by real challenges that could limit upside. Whether Washington advocacy proves to be the missing piece or just another chapter in a tough year remains to be seen. One thing’s for sure—the next few months will be telling.
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