Hyperliquid’s native token, HYPE, has entered a challenging phase after losing significant ground in recent weeks. The token has dropped sharply from its yearly peak, weighed down by weakening network activity and a broader crypto market slowdown. With technical indicators now flashing warning signs, investors are questioning whether more downside could be ahead.
HYPE Slides After Strong Rally Earlier This Year
HYPE recently reached a yearly high of $37.8 but has since declined by about 25%, falling to a monthly low of $28.5 last Wednesday. The token has recovered slightly from that level and was trading at around $30.2 at the time of writing. However, the overall trend over the past two weeks has remained negative, reflecting cooling investor sentiment.
This downturn comes as the broader crypto market faces uncertainty. Bitcoin, often seen as the leading indicator for the entire sector, has struggled to maintain momentum after failing to hold key psychological levels. When Bitcoin weakens, it often drags down altcoins as well, and Hyperliquid appears to be following this pattern.
Falling Revenue and TVL Signal Cooling Activity
Fundamental data also highlights growing concerns about the network’s performance. According to DeFiLlama, Hyperliquid’s weekly revenue dropped sharply by 55%, falling to $11.8 million last week. This steep decline suggests reduced trading activity on the platform.
At the same time, the total value locked (TVL) on Hyperliquid has also decreased. After reaching a yearly high of $4.7 billion, the TVL has now fallen to $4.24 billion. This decline indicates that users may be withdrawing funds or reducing their participation, which can weaken overall demand for the token.
Lower revenue has another important impact. Hyperliquid uses part of its revenue to buy back and burn tokens, a mechanism designed to reduce supply and support price growth. When revenue drops, the platform has fewer resources to carry out these buybacks, reducing the deflationary pressure that typically helps sustain price levels.
Technical Indicators Point to Continued Weakness
Technical analysis suggests that bearish momentum may continue in the near term. On the daily chart, the MACD indicator has confirmed a bearish crossover, with expanding red histogram bars showing that selling pressure is increasing.
The Relative Strength Index (RSI) is also trending downward and approaching the neutral zone, indicating weakening buying strength. Meanwhile, the token is moving closer to the key 38.2% Fibonacci retracement level at $28.4, a crucial support level based on its price movement between last April and September.
If HYPE falls below this support, it could trigger a deeper correction toward $21.10, representing a potential decline of nearly 20% from current levels.
Recovery Still Possible Under the Right Conditions
Despite the bearish outlook, a recovery scenario remains possible. If HYPE manages to hold above the $28.4 level and attract renewed buying interest, it could rebound toward its yearly high of $37.8.
Such a recovery would likely depend on improved conditions across the crypto market, particularly a renewed uptrend in Bitcoin. Increased trading activity and stronger revenue on the Hyperliquid platform would also be essential to restore investor confidence and support price growth.
For now, however, Hyperliquid’s price remains under pressure as both technical indicators and network fundamentals point to cautious sentiment among traders.
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