🌎 HYPE Token Price Drops 20% Amid Security Concerns

Hyperliquid’s HYPE Token Experiences 20% Price Dip Amid Growing Concerns

Hyperliquid’s native token, HYPE, has seen a significant price drop, falling by 20% to trade at $26.54, with its market cap slipping below $9 billion. This downturn comes after the token surged to a record high of $34.96 on December 22, achieving nearly 200% cumulative gains since its airdrop listing price of $11.

What’s Behind the Price Drop?

HYPE’s price rally was fueled by the platform’s innovative approach to eliminating gas fees for transactions and low fees on perpetual contracts and trade openings. However, concerns within the community have led to the token’s price decline, making HYPE the top trending coin on market capitalization rankings.

Whale Sell-Off and Security Concerns

The price drop coincided with a major whale, identified as laurentzeimes, selling over 1 million HYPE tokens using Hyperliquid DEX’s TWAP (Time-Weighted Average Price) mechanism. So far, the whale has sold 175,000 tokens, which has contributed to the token’s price decline.

Additionally, cybersecurity expert Tayvano has speculated that North Korean hackers are actively trading on the platform, potentially attempting to test a vulnerability in Hyperliquid’s security. This has raised concerns, especially given that Hyperliquid operates with a relatively small number of validators.

Outflows and Market Impact

Following the discovery, Hyperliquid has experienced over $42 million in USDC outflows, its largest since launch. This has likely exacerbated HYPE’s price plunge, with the token’s market cap dropping to $8.87 billion, making it the 23rd largest crypto asset.

Analyst Outlook

Despite the recent downturn, analysts remain optimistic, predicting that HYPE could resume its climb and potentially reach a new all-time high. Analyst CJ has expressed a bullish outlook for HYPE, suggesting it could climb towards a $40 target if it breaks above the key $30–$32 resistance level.

Tips for investors:

Keep an eye on HYPE’s price movement and watch for potential buying opportunities.
Monitor the market for any updates on Hyperliquid’s security and validator count.
Consider the potential impact of whale sell-offs on the market.

Hyperliquid’s Strong Performance in DeFi

Hyperliquid’s strong performance in the DeFi sector, where it leads the decentralized perpetual trading market, suggests that the platform has a solid foundation for growth. With a weekly trading volume that peaked at $98.6 billion last week and a TVL that recently surpassed $3.4 billion, Hyperliquid’s potential for long-term success remains high.