Hyperliquid is becoming the focal point for cryptocurrency investors, not only due to its outstanding performance but also because of the strong reception from major 'whales' in the industry.
The native token of this platform, HYPE, is also witnessing a surge of interest – especially after a recent spectacular price increase. Since the beginning of April, HYPE has continuously climbed, reaching a new all-time high of over $44 on Wednesday – equivalent to an increase of more than 365% from the low established at the beginning of this year.
However, the excitement seems to be slowing down as buying power gradually weakens. This is reflected in the negative divergence signal between price and the RSI indicator – often an early warning sign for the possibility of a deep correction.
Nevertheless, institutional investors and whales seem to have no intention of retreating. The latest data shows they continue to accumulate HYPE, contributing to the current rally. The MFI (Money Flow Index) indicator also confirms this trend as inflows have surged continuously over the past five days.
Is market sentiment gradually shifting to negative?
HYPE's price continues to maintain impressive strength, but the RSI index is showing signs of weakening - reflecting that the growth momentum is gradually diminishing. This could be an early signal for a correction in the second half of June.
On-chain data is also starting to show increasing selling pressure. Notably, the volume of Long liquidations for HYPE surged to $2.11 million during Friday's trading session - more than twice the volume of Short liquidations, which was barely $900,000 on the same day.
This trend is even more pronounced when observing the data from the past 7 days: Long liquidations have spiked, while Short liquidations have decreased significantly. This development reflects a significant change in market sentiment.
At the same time, the open interest (OI) has also just set a new peak, reaching $1.90 billion in the last 24 hours. This indicates that large capital is seeking liquidation opportunities to take profits.
Additionally, the volume of derivatives trading on June 14 soared to $3.3 billion - the highest ever recorded in a single day, further reinforcing the hypothesis that the market is entering a phase of high volatility.
The question now is: will the aforementioned signals continue to ignite demand for HYPE, or will they simply indicate the extreme sensitivity of this token to large-scale liquidations? The answer may lie in the factors that have driven the strong wave of interest in Hyperliquid over the past two months.
Does Hyperliquid's performance accurately reflect the value of HYPE?
Not only attracting attention by setting a new price peak last week, the Hyperliquid ecosystem has also recorded a series of impressive records in many important metrics.
Specifically, the stablecoin liquidity on this platform has surged significantly, reaching $3.88 billion on Thursday - although it later experienced a slight adjustment. At the same time, the total value locked (TVL) on Hyperliquid's layer 1 network also soared to a record high of $1.795 billion in the past 24 hours, demonstrating strong and sustainable growth of the project.
The core factor driving this rally comes from the increasing acceptance of Hyperliquid's DEX by the community. A clear indication is that trading volume on the DEX has made an impressive recovery: from a low of just $50.9 million on April 5, this figure has skyrocketed to a new peak of over $735 million on Friday.
The explosive heat of Hyperliquid this year shows that the layer 1 network is effectively harnessing the influx of capital into the entire ecosystem – and that value is gradually permeating into HYPE's price in a clear manner.
What has driven the strong rally of HYPE?
In addition to the demand from large institutions as previously analyzed, HYPE also possesses high applicability when used for payments, project governance, providing liquidity, and staking to generate passive income for holders.
These fundamental factors will play a key role in shaping the price trend of HYPE in the coming weeks. If indicators such as total value locked (TVL) and trading volume on decentralized exchanges (DEX) continue to maintain growth momentum, this will bolster investor confidence and help mitigate the risk of price corrections.
Conversely, in a scenario where these indicators decline sharply, HYPE may face a wave of profit-taking and significant selling pressure, leading to the risk of a deep short-term correction.