Hyperliquid Faces Challenges as Token Price Slides
Hyperliquid, a well-known decentralized exchange, is experiencing tough times. Its token, HYPE, has hit a new low of $11.10,a 67% drop from its peak of $35.20. This decline has shrunk its market cap from nearly $10 billion to $3.8 billion.
The HYPE token’s fall is partly due to dilution risks. With a total supply of almost 1 billion tokens and 333 million in circulation, the network will start releasing 216,580 HYPE tokens daily in November. This will continue until November 2028. without a burning mechanism, these token unlocks can lead to higher inflation and dilution for existing token holders.
Hyperliquid’s troubles began after the JELLY crisis. Developers abruptly delisted the token, causing meaningful losses for investors. This crisis has led to reduced activity on the network.
DeFi Llama data reveals that perpetual futures volume dropped to $175 billion in March, down from $200 billion in January. Hyperliquid’s seven-day volumes fell by 27% to $38 billion, while daily volume decreased by 70% to $2.4 billion.
Technical analysis shows the HYPE price has fallen from $35.12 to $11.6. It recently broke below the key support level of $12.11, its lowest point on March 13. The token has also formed a bearish flag pattern, indicating a potential continuation of the downward trend. If the price moves above $13.37, it could invalidate the bearish outlook.
For more insights, check the Hyperliquid price chart.
