The HYPE token of Hyperliquid has dropped to a seven-month low as the market responds to a significant decline in the protocol's leadership and renewed concerns about recent token movements.
According to BeInCrypto, the token has dropped more than 4% in the past 24 hours to a level of 29.24 USD, the weakest level since May.
Why has the price of HYPE decreased?
Data from CoinGlass shows that this decline triggered liquidations of more than 11 million USD, resulting in increased pressure in the cautious market.
This change indicates a sudden reversal for a protocol that once dominated the on-chain perpetuals market. Earlier in the year, Hyperliquid controlled the decentralized perpetuals market with nearly all power. However, this superiority has diminished.
Data from DeFiLlama reveals a significant decline in leadership, with the protocol's market share in perpetuals dropping from a peak of nearly 70% to less than 20% at the time the news broke.
This change can be linked to the emergence of more aggressive competitors such as Aster and Lighter, which have attracted volume through superior incentive programs.
The consequence is that investors are hastily re-evaluating the price of HYPE and no longer see it as the inevitable winner of this sector, but rather as an old leader losing users.
At the same time, the internal movements of tokens have significantly shaken confidence.
The blockchain analysis company Lookonchain reported last month that the team-controlled wallet withdrew 2.6 million HYPE valued at approximately 89 million USD.
While the team has deposited back about 1.08 million tokens, the market remains focused on the outflow.
There are a total of 900,869 HYPE remaining liquid in wallets, and another 609,108 HYPE valued at approximately 20.9 million USD has been moved to Flowdesk, a well-known market maker. The project has also sold an additional 1,200 tokens at a price of approximately 41,193 USDC.
These events have had a significant psychological impact on the community. More can be read here.
As a result, HYPE has lost nearly 30% of its value over the past 30 days and has been ranked as the worst-performing asset among the top 20 cryptocurrencies by market capitalization.
In light of this, crypto traders have a very negative sentiment towards the token. Duo Nine, a crypto trader, suggested that the token value could drop to as low as 10 USD.
Mentally prepare for this situation if you want to survive what is coming, analysts have stated.
