The crypto asset Hyperliquid ( $HYPE PE ) has experienced sharp fluctuations recently, losing about 25% of its value due to concerns over increased supply and new coin unlocks. However, the surprise came with the price continuing to surge, hitting new all-time highs as it surpassed the $63 mark.
Even though this movement seems contradictory at first glance, traders are looking at the project from a completely different angle.
The primary concern lies in the fully diluted valuation (FDV), as a large portion of the HYPE supply is still not traded and will be gradually released into the market in the future.
According to 'CoinGecko' data, the fully diluted market cap of the project has surpassed $60 billion, even though only a limited amount of tokens are currently available for trading.
Typically, this type of setup leads to strong selling pressure over time, especially when early investors' and shareholders' crypto unlocks begin, which has led many investors to anticipate a bearish scenario similar to what happened with other crypto projects in the past.
Concerns have also increased as around 10 million coins linked to shareholder allocations are set to unlock, raising expectations of a significant sell-off in the market.
But 'Hyperliquid' has defied these expectations, as it has started to act more like a trading company generating actual cash flows, rather than just your typical speculative project.
The platform continues to record massive trading volumes in perpetual futures contracts, alongside a rising total value locked (TVL), and generating solid revenues and trading fees compared to most other DeFi protocols.
Recent reports indicate that 'Hyperliquid' is achieving revenue levels that have led some analysts to compare it to major derivatives trading platforms like CME, rather than viewing it as just an ordinary platform.
At the same time, short positions have accelerated the rise, as funding rates turned negative and bearish bets piled up against the coin.
With 'HYPE' breaking through the $50 levels, many short sellers had to close their positions, leading to a strong 'Short Squeeze' wave that pushed the price to new all-time highs, coinciding with a noticeable increase in open interest.
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