Hyperliquid’s native token, HYPE, has recently experienced a significant price dip, dropping by 20% to trade at $26.54. This decline comes after the token reached a record high of $34.96 on Dec. 22, marking a nearly 200% increase from its airdrop listing price of $11. At its peak, Hyperliquid’s market cap exceeded $11.5 billion, placing it among the top 20 coins by market cap.
Launched in June 2023, Hyperliquid DEX has gained popularity for its innovative approach to eliminating gas fees for transactions. The platform offers low fees on perpetual contracts and trade openings, with revenue reinvested back into the ecosystem through token buybacks or supporting ecosystem vaults.
The surge in HYPE’s price followed one of the most highly anticipated token airdrops of the year, where Hyperliquid distributed 310 million tokens to its users, marking the largest airdrop in crypto history. However, the token has faced a setback amidst growing concerns within its community, making it the top trending coin on CoinGecko.
The recent price drop in HYPE can be attributed to a major whale, laurentzeimes, selling over 1 million HYPE tokens on Hyperliquid DEX using the TWAP mechanism. Additionally, concerns have been raised about North Korean hackers actively trading on the platform, with experts speculating that this activity may be an attempt to test the platform’s security vulnerabilities.
Despite these challenges, analysts remain optimistic about HYPE’s future prospects, with some predicting that the token could resume its climb towards a new all-time high. Analysts suggest that if HYPE breaks above the key $30-$32 resistance level, it could potentially reach a target of $40. While the short-term trend may appear bearish, a drop to $18-$22 could present a strong buying opportunity for traders.
Hyperliquid’s strong performance in the DeFi sector is another factor supporting a bullish outlook for HYPE. The platform leads the decentralized perpetual trading market with a weekly trading volume that peaked at $98.6 billion last week and a TVL that recently surpassed $3.4 billion for the first time this month, up from $188 million in October. Overall, despite recent challenges, HYPE’s potential for growth remains promising in the ever-evolving crypto market.