Hyperliquid Token HYPE Slump 6%, Retracement After Record High

The HYPE token, representing the Hyperliquid decentralized exchange, experienced a 6% decline during Thursday trading, briefly dropping below $36, its lowest level in ten days, according to cryptocurrency data provider CoinGecko. This marks a significant retreat from its recent all-time high of $45.59 set just three days prior.

Market Context

The token was the worst performer among the top 100 cryptocurrencies by trading volume on the day. The broader altcoin market also saw mild declines, while the overall cryptocurrency market capitalization dipped by 2.5%.

Analysis: Reasons for the Slump

Analyst Rajiv Sawhney from Wave Digital Assets International linked the pullback to investor profit-taking after recent large buy-ins by companies Eyenovia (NASDAQ) and Lion Group to establish crypto treasuries. Sawhney noted a recurring pattern where corporate announcements often trigger buying followed by selling.

The HYPE token had surged partly due to its dominant position in high-leverage perpetual futures trading. The token was first listed in December 2024. Its recent price increase also coincided with a reduction in trading volume and subdued market direction.

Illia Otychenko, an analyst at CEX.IO, pointed to declining exchange trading volume and the weakening of Hyperliquid’s “buy-and-burn mechanism”. This mechanism, where transaction fees are automatically converted into additional tokens, provided upward price pressure that has diminished as trading activity slowed.