Hyperliquid’s HYPE Slumps as Attention and Capital Rotate to New DEX Tokens

Hyperliquid’s HYPE token is on its fourth consecutive day of a downtrend, while recently launched decentralized exchange tokens have more than doubled over the weekend.

“There’s definitely been an attention shift over the past few days,” Illia Otychenko, lead analyst at CEX.IO told Decrypt, as decentralized exchange tokens including Aster and Avantis, and STBL surged by as much as 124%, 125% and 147% respectively over the weekend, per TradingView data.

Hyperliquid, on the other hand, has shed over 13% from its weekend peak and extended its losses to 7.4% today, at one point dropping to $47.83, per CoinGecko.

On prediction market Myriad, launched by Decrypt‘s parent company DASTAN, users flipped bearish on HYPE over the weekend. On Sunday, predictors peaked at a 62% chance of HYPE’s next move carrying it to $69, but by Monday morning those figures had almost reversed, with users placing a 58% chance on HYPE crashing to $39.

Why is HYPE dropping?

The drop in Hyperliquid’s price is due to investors booking profit, Peter Chung, head of research at Presto Research, told Decrypt.

Otychenko echoed Chung’s outlook by stating that there’s “a bit of capital rotation” as whales sell their Hyperliquid tokens.

Among them are Arthur Hayes, founder of crypto exchange BitMEX, who sold 96,600 HYPE on Sunday, worth some $5.1 million.

In addition, roughly 237.8 million HYPE are set to unlock linearly starting November 29, Hayes’ family fund Maelstorm highlighted in a Monday tweet. At the current price of $49, per CoinGecko data, the notional value of the unlock will be roughly $11 billion.

The buybacks from Hyperliquid and the buying pressure from Digital Asset Treasury companies are “a drop in the bucket compared against impending HYPE unlocks,” the Maelstrom article added, citing a potential supply overhang of $410 million per month.

With heightened competition from new decentralized exchanges now palpable, the main question, according to Otychenko, is whether the newly surging tokens can keep the market’s attention once their initial hype cools down.

“Right now, risks are high,” he added. “Aster in particular has over 90% of supply concentrated in just a few wallets, making it prone to sharp swings or manipulation.”

Aster, a Binance Smart Chain-based DEX, recently received an endorsement from Binance co-founder CZ, who tweeted “Good start. Keep building,” at the project last Wednesday.