The widely used perpetual decentralized exchange is currently facing significant challenges, as its token approaches an all-time low and its network volume experiences a steep decline.
The HYPE token has dropped to a low of $11.10, representing a staggering 67% decrease from its peak of $35.20. This downturn has seen its market capitalization fall from nearly $10 billion in December to about $3.8 billion.
A contributing factor to the HYPE token’s decline is the notable risk of dilution. It has a total supply nearing 1 billion tokens, with approximately 333 million currently in circulation.
Token unlocks for HYPE are set to commence this November, releasing 216,580 tokens valued at $2.52 million each day, with the final unlock scheduled for November 2028. These unlocks, especially in the absence of a token-burning mechanism, can result in increased inflation and a dilution of existing holders’ stakes.
The price of HYPE has also suffered due to significant issues following the recent JELLY crisis, where the developers abruptly delisted the token, leading to considerable investor losses.
This crisis has coincided with a downturn in network activity. Recent data indicates that the perpetual futures volume decreased to $175 billion in March, marking a second consecutive month of decline; this volume had peaked at nearly $200 billion in January amid a surge in Solana meme coins.
Hyperliquid’s seven-day volumes have fallen over 27% to $38 billion, while daily volume has plummeted 70% to $2.4 billion.
A similar decline is observed on Hyperliquid’s layer-1 network, where the volume decreased by 28.5%, landing at $702 million.
HYPE Price Technical Analysis
The 4-hour chart indicates that the price of Hyperliquid has dropped from $35.12 to $11.6, recently falling below a critical support level at $12.11, which was its lowest point since March 13.
Falling below this threshold negated the potential for a double-bottom formation.
The token has also exhibited a bearish flag pattern, distinguished by a vertical line and a rectangular consolidation, which is a common bearish continuation pattern in technical analysis.
With HYPE trading below the 50-period moving average, it seems likely that the token will continue to decline as sellers aim for the all-time low of $10.45. A breakthrough above the resistance level at $13.37 would invalidate this bearish perspective.