Why did the price of HYPE fall?

Hyperliquid (HYPE) dropped 7.85% in the last 24 hours, underperforming the overall crypto market, which fell by 2.57%. The main reasons include large Bitcoin trader activity, negative technical signals, and new competition from Solana’s decentralized exchange (DEX).

1. Bitcoin Whale Activity – A large trader placed a $122 million short bet on Bitcoin through Hyperliquid, adding downward pressure on the market.
2. Technical Weakness – HYPE’s price fell below important support levels, showing signs of continued weakness.
3. New Competition – Solana’s launch of the Percolator DEX is raising concerns about Hyperliquid’s market position.

Deep Dive

1. Bitcoin Whale Activity (Negative Impact)

A major trader, often called a “whale,” opened a $122 million short position on Bitcoin using 10 times leverage on Hyperliquid (Daily Hodl). This means they are betting that Bitcoin’s price will fall. This move caused Bitcoin’s price to drop 2% to $108,500 and led to a chain reaction of forced sell-offs on platforms like Hyperliquid.

What this means: Large leveraged bets increase risk across the market. Since HYPE’s price is linked to how much trading happens on its platform, the drop in trading volume (down 15.33% in 24 hours) and fear of forced sell-offs can push prices lower.

2. Technical Weakness (Bearish Signals)

HYPE’s price fell below two key moving averages: the 30-day simple moving average (SMA) at $43.47 and the 200-day exponential moving average (EMA) at $38.23. These are important price levels traders watch to gauge market trends. Other indicators show:

• MACD: -2.96, indicating downward momentum
• RSI: 40.56, nearing oversold but no clear sign of a rebound yet
• Important support level at $32.26 (based on Fibonacci retracement).

What this means: Traders are likely selling off their positions, expecting prices to fall further. Trading volume is low (3.67%), which can make price swings more extreme.

3. Competition from Solana’s DEX (Mixed Effects)

Solana Labs recently launched Percolator, a fast, perpetual DEX designed to reduce network congestion by sharing matching engines (Yahoo Finance).

What this means: Although Hyperliquid still leads in derivatives trading volume ($313 billion over 30 days), new competitors like Percolator could slow its user growth. HYPE’s price has dropped 31.88% over the past month, reflecting increased competition in the space.

Conclusion

HYPE’s recent price decline is driven by Bitcoin-related market stress, technical breakdowns, and growing competition. Despite this, Hyperliquid’s core business remains strong, with an annualized revenue of $1.2 billion. However, short-term caution is advised.

Key levels to watch: Can HYPE hold the $32.26 support? Falling below this could push prices down to $26–$29, while recovering above $38.09 might indicate stabilization. Keep an eye on Bitcoin’s price movements and how quickly Solana’s Percolator gains users.

What could affect the price of HYPE?

Hyperliquid’s price is caught between exciting new features and tough market challenges.

1. HIP-3 Upgrade Impact – New permissionless perpetual markets could boost trading or weaken value (Mixed)
2. Stablecoin Competition – A governance battle over USDH stablecoin may split the community but could also strengthen the ecosystem (Bullish/Bearish)
3. Whale Leverage Risks – Large $122M Bitcoin short positions increase risk during market swings (Bearish)

Deep Dive

1. Protocol Upgrades & Competition (Mixed Impact)

Overview:
On October 13, Hyperliquid rolled out the HIP-3 upgrade, allowing developers to create perpetual markets by staking 500,000 HYPE tokens (worth over $18 million). This aims to make market listings more decentralized. However, competitors like Solana’s Percolator DEX and Justin Sun’s SunPerp are growing fast, with SunPerp’s trading volume increasing by 250% in October.

What this means:
HIP-3 could open up new trading options, such as prediction markets and real-world assets. But the high staking requirement might concentrate control among a few holders. Plus, strong competitors backed by big players like Solana threaten Hyperliquid’s current 70% share of the perpetual DEX market (CoinDesk).

2. USDH Stablecoin Governance (Bullish/Bearish)

Overview:
Hyperliquid’s USDH stablecoin is at the center of a governance battle between Paxos, which offers 95% of revenue to HYPE holders, and Frax Finance, which proposes redirecting 100% of yields. A community vote in September showed 62% support for Paxos’ approach, which aligns with regulatory standards.

What this means:
If USDH gains traction, it could bring over $5 billion in stable liquidity and encourage HYPE token buybacks. However, competing governance proposals, like Ethena’s, could delay the stablecoin’s launch, similar to past delays seen with MakerDAO’s DAI (Cryptotimes).

3. Whale Activity & Systemic Risk (Bearish)

Overview:
One large trader holds a $122 million Bitcoin short position on Hyperliquid, using 10x leverage, with liquidation set if Bitcoin hits $135,000. During October’s flash crash, $16 billion in liquidations occurred, including $10 billion on Hyperliquid, highlighting risks during sudden market drops.

What this means:
Big whale positions make Hyperliquid’s price more sensitive to Bitcoin’s ups and downs. If Bitcoin rises above $135,000, it could trigger a chain reaction of forced sales, similar to the October 10 crash that wiped out 13% of HYPE’s value in just 15 minutes (Yahoo Finance).

Conclusion

Hyperliquid’s future price depends on balancing new innovations like USDH and HIP-3 with challenges from market competition and risky leverage. While upgrades could spark another big rally (it gained 1,023% last year), upcoming token unlocks worth $11.9 billion in November and a weak altcoin market (Altcoin Season Index at 27/100) could slow momentum.

Watch: Will USDH stablecoin’s total value locked (TVL) exceed $1 billion by December? And will the SEC approve Bitwise’s HYPE ETF application?

What are people saying about HYPE?

Hyperliquid’s HYPE token is at a crossroads, balancing strong buying interest with concerns about an overcrowded market. Here’s the latest:

1. Breakout potential – Experts say HYPE could climb above $70 if it breaks key resistance levels.
2. Big players’ moves – A $4.75 million long position versus a $122 million Bitcoin short is stirring debate about price swings.
3. Platform growth – Rising trading volumes and new stablecoin partnerships are fueling optimism.

Deep Dive

1. @cryptonary: Bullish outlook aiming for $70+

"HYPE is holding steady above $45.80, with the next hurdle at $60. The RSI indicator breaking out matches the price increase."
– @cryptonary (283K followers · 1.2M impressions · 2025-09-13 21:06 UTC)
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What this means: This is a positive sign for HYPE. Technical indicators and market fundamentals are lining up, with $52-$53 acting as a key support level. If HYPE closes above $60, it could trigger more buying momentum.

2. @CoinRank_io: Arthur Hayes’ bold growth forecast

"Hayes predicts HYPE could capture 26% of the $10 trillion stablecoin market, leading to over $25 billion in yearly revenue."
– @CoinRank_io (91K followers · 620K impressions · 2025-08-25 04:22 UTC)
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What this means: This is a very optimistic outlook, but it depends on Hyperliquid maintaining its dominance in derivatives trading, where it currently holds 71% of on-chain perpetual volume (LeveX).

3. @DU09BTC: Warning about an overcrowded trade

"More than 180 teams are building on Hyperliquid, but retail investors’ fear of missing out (FOMO) could lead to a price pullback."
– @DU09BTC (112K followers · 890K impressions · 2025-09-08 12:05 UTC)
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What this means: This is a cautionary view. Heavy speculation and a high fully diluted valuation (FDV) of $41 billion might cause some investors to take profits, especially if Bitcoin’s price remains volatile.

Conclusion

The overall sentiment on HYPE is optimistic but cautious. Technical signals and strong platform growth (with $5.5 billion in monthly trading volume) support higher price targets. However, the token’s impressive 1,023% gain over the past year and the large leveraged positions—like the $122 million Bitcoin short on Hyperliquid—suggest potential volatility ahead. Keep an eye on the $52-$53 support area; if HYPE falls below this, the upward trend could be at risk. Conversely, staying above $60 could confirm a move toward $70.

What is the latest news about HYPE?

Hyperliquid is making waves by growing its ecosystem and handling exchange challenges, all while big investors make bold moves. Here’s what’s new:

1. Binance Listing Terms Under Scrutiny (October 21, 2025) – Founders claim Binance demands large token allocations for listings, highlighting Hyperliquid’s independence.
2. $300M Crypto Hedge Fund Supports HYPE (October 21, 2025) – A fund led by a GoldenTree veteran names HYPE a key holding in a strong-performing portfolio.
3. HIP-3 Upgrade Launches (October 13, 2025) – New permissionless perpetual contracts go live, making the protocol more decentralized.

In-Depth Look

1. Binance Listing Terms Under Scrutiny (October 21, 2025)

What happened: Several crypto founders say Binance asks for 3.5% to 8% of tokens in exchange for listing projects, according to a Blockworks report. Binance denies this. Hyperliquid stands out by succeeding without relying on Binance, holding nearly 40% market share. Binance handled $700 billion in trading volume in July 2025, but Hyperliquid’s market cap of over $10 billion shows it can thrive independently.
Why it matters: This is neutral for HYPE. While Binance’s scrutiny might cause some short-term uncertainty around centralized exchanges (CEX), Hyperliquid’s independence supports its decentralized mission. Still, volatility in the exchange sector could have some impact.

2. $300M Crypto Hedge Fund Supports HYPE (October 21, 2025)

What happened: Joe Naglar’s Feynman Point Asset Management launched a $300 million crypto-focused hedge fund, with HYPE as a top asset, according to Forbes. The fund highlights Hyperliquid’s 42% annual returns since 2022 and its role in decentralized exchange innovation. The fund also owns shares in Sonnet BioTherapeutics, which plans to merge with Hyperliquid Strategies.
Why it matters: This is positive for HYPE. Institutional support from a major fund shows strong confidence in Hyperliquid’s long-term potential. More institutional interest could reduce the number of tokens available on the market (currently 34% of total supply).

3. HIP-3 Upgrade Launches (October 13, 2025)

What happened: The HIP-3 upgrade lets projects create permissionless perpetual contracts by staking 500,000 HYPE tokens (about $18 million). After the announcement, HYPE’s price jumped 12.33%, though it later adjusted amid broader market drops, as reported by Yahoo Finance.
Why it matters: This is a long-term positive. By allowing anyone to create markets, Hyperliquid strengthens its position against competitors like Solana’s Percolator. However, the staking requirement may temporarily reduce liquidity and cause short-term price swings.

Conclusion

Despite challenges in the exchange sector, Hyperliquid is gaining support from institutions and increasing its protocol independence. Key factors include hedge fund backing, the decentralizing HIP-3 upgrade, and standing apart from centralized exchanges. While HYPE’s price dropped 31% over the past month, it’s still up over 1,000% year-over-year. The big question: Can Hyperliquid’s ecosystem-focused approach keep momentum as interest in altcoins cools? Keep an eye on HIP-3 adoption and the progress of the Sonnet BioTherapeutics merger.

What is expected in the development of HYPE?

Hyperliquid is making steady progress with these key updates:

1. USDH Stablecoin Launch (Q4 2025) – This will help align incentives by using interest earnings to buy back HYPE tokens and share yields with the community.
2. HyperEVM Improvements (2026) – Upgrades to support better smart contract compatibility and easier cross-chain transactions.
3. Growing the Ecosystem – Hosting events like hackathons and forming partnerships to expand decentralized finance (DeFi) applications.

Deep Dive

1. USDH Stablecoin Launch (Q4 2025)

What’s happening?
Hyperliquid is introducing USDH, a stablecoin designed to use most of its reserve interest to buy back HYPE tokens (Paxos proposal) and return all yield earnings to the community through Frax Finance’s system. This aims to increase liquidity and reduce the number of HYPE tokens in circulation, which can support the token’s value.

Why it matters:
Buybacks can make HYPE tokens scarcer, potentially increasing their value. Sharing yields encourages people to hold their tokens longer. However, there are risks like regulatory challenges for stablecoins and competition from well-known stablecoins such as USDC.

2. HyperEVM Improvements (2026)

What’s happening?
HyperEVM, which lets Hyperliquid work with Ethereum-based smart contracts, will get new features. These include tools like CoreWriter for better communication within the network and partnerships with services like Gelato and Stargate to make cross-chain operations smoother (RedStone blog).

Why it matters:
Better interoperability can attract more developers and increase activity on the platform. Still, building and maintaining cross-chain technology is complex and depends on reliable partners, which introduces some risks.

3. Growing the Ecosystem

What’s happening?
Hyperliquid plans to hold its second hackathon in 2026, following a successful first event in Seoul. Over 180 teams are already building projects focused on derivatives, lending, and real-world asset solutions. Collaborations with firms like VanEck (known for staking ETFs) show growing institutional interest.

Why it matters:
A diverse and active developer community strengthens the network and encourages more users. Success depends on keeping developers engaged and offering competitive fees compared to other platforms like Aster.

Conclusion

Hyperliquid’s roadmap focuses on aligning economic incentives with USDH, improving technical capabilities through HyperEVM, and expanding its ecosystem. These efforts could help it become a top platform for DeFi derivatives. However, regulatory issues and market ups and downs remain challenges. It will be interesting to see how HYPE’s token economics change if USDH gains popularity faster than expected.

What updates are there in the HYPE code base?

Hyperliquid is making important updates to focus on decentralization and growing its ecosystem.

1. Permissionless Perps via HIP-3 (October 13, 2025) – Now, anyone can create perpetual markets without needing approval from the core team.
2. HyperEVM Integration (August 21, 2025) – Adding Ethereum compatibility to support more advanced smart contracts.
3. Validator Slashing Safeguards (October 13, 2025) – New penalties to discourage bad actors from launching harmful markets.

Deep Dive

1. Permissionless Perps via HIP-3 (October 13, 2025)

What’s new? HIP-3 lets anyone launch perpetual futures markets by staking 500,000 HYPE tokens. This shifts control from the core developers to the community.

The upgrade requires certain on-chain conditions for creating markets, like setting leverage limits and choosing price feeds. These markets work seamlessly with HyperCore (Hyperliquid’s orderbook system) and HyperEVM for programmable features.

Why it matters: This is good news for HYPE holders because it decentralizes market creation, encourages developers to build more trading options, and locks up HYPE tokens through staking. (Source)

2. HyperEVM Integration (August 21, 2025)

What’s new? HyperEVM brings Ethereum-compatible smart contracts to Hyperliquid. This means developers can create decentralized finance (DeFi) apps like lending platforms and yield aggregators on the network.

By combining HyperCore’s fast orderbook with Ethereum’s flexible smart contracts, Hyperliquid supports features like flash loans and cross-layer liquidity. More than 10 DeFi projects, including HyperLend and Felix, have already launched using this system.

Why it matters: This upgrade benefits HYPE by attracting developers, increasing the token’s use as gas for transactions, and strengthening the overall Hyperliquid ecosystem. (Source)

3. Validator Slashing Safeguards (October 13, 2025)

What’s new? Validators who approve harmful or malicious markets now risk losing their staked HYPE tokens.

The system limits the total exposure for new markets and requires audits for high-risk assets. This adds a security layer that balances the open market creation introduced by HIP-3.

Why it matters: This change is neutral for HYPE holders—it helps reduce risks but makes things a bit more complex for validators.

Conclusion

Hyperliquid is moving toward greater decentralization (HIP-3), better compatibility with other blockchains (HyperEVM), and stronger security (validator slashing). These upgrades position it as a leader in on-chain derivatives trading. As more builders gain control, it will be interesting to see if the demand for staking HYPE tokens keeps pace with the growth of new markets.