The HYPE cryptocurrency has fallen to its lowest level in seven months as the market reacted to the sharp decline in protocol dominance and renewed concerns about recent moves of the currency.
According to BeInCrypto data, the price of the currency has dropped by more than 4% in the last 24 hours to 29.24 $, which is its weakest level since May.
Why is the price of HYPE dropping?
CoinGlass data showed that the decline led to liquidations of over 11 million $, adding pressure to a market already trending towards caution.
This shift represents a sharp reversal for a protocol that once dominated the perpetual contracts market on the blockchain. Earlier this year, Hyperliquid dominated the decentralized perpetual contracts market with near-total authority. However, that advantage has faded.
Data from DeFiLlama reveals a stunning erosion of its dominance, with the protocol's share of the perpetual contracts market dropping from a peak of around 70% to below 20% at the time of the article's publication.
This can be linked to the emergence of more aggressive competitors like Aster and Lighter, who have succeeded in drawing volume through better incentive programs.
As a result, investors are quickly repricing HYPE and no longer see it as the inevitable winner in the sector but as an aging entity losing users.
At the same time, internal currency movements have shaken confidence.
A report from the blockchain analysis company Lookonchain last month indicated that the wallets controlled by the team held 2.6 million HYPE, valued at around 89 million $.
While the team has restocked around 1.08 million coins, the market is focused on outflows.
A total of 900,869 HYPE remained liquid in the wallet, and another 609,108 HYPE, valued at approximately 20.9 million dollars, were transferred to Flowdesk, a prominent market maker. The project also sold 1,200 additional coins for around 41,193 dollars in USDC.
These events have psychologically impacted the community.
As a result, HYPE has dropped by about 30% of its value over the past thirty days, becoming the worst-performing asset among the top 20 cryptocurrencies by market capitalization.
Cryptocurrency traders have become significantly pessimistic about the token. Cryptocurrency trader Duo Nine suggested that the token's value could drop to just 10 dollars.
The analyst stated, "Prepare yourself mentally for such a scenario if you want to survive what is to come."
