Hyperliquid faces Challenges as Token Price adn Network Volume Decline
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 reduced 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 could lead to higher inflation and dilution for existing holders.
Hyperliquid’s troubles began after the JELLY crisis. Developers abruptly delisted the token, causing significant losses for investors. This event has led to a drop in network activity. According to DeFi Llama, perpetual futures volume fell to $175 billion in March, down from $200 billion in January.
Hyperliquid’s seven-day volumes have decreased by over 27% to $38 billion,while daily volume has fallen by 70% to $2.4 billion. The layer-1 network volume also dropped by 28.5% to $702 million.
Technically, the Hyperliquid 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. This invalidated a potential double-bottom pattern.
The token has formed a bearish flag pattern, a common bearish continuation signal. It has also moved below the 50-period moving average. if the price stays below $13.37, it may continue falling towards its all-time low of $10.45.
