Hyperliquid’s Market Performance

Hyperliquid saw steady growth in new users and daily volume over the past two months

Decline in Open Interest and hike in spot selling could take HYPE’s price below the nearby support level

At the time of writing, the total crypto market cap was down 13% from January 9. In fact, the altcoin market cap (excluding Ethereum) was down 17.5%. In comparison, the DEX platform Hyperliquid’s (HYPE) token was down by 7.2% from that day’s open.

The 1-day price chart showed that HYPE tested the January lows at $18.5 multiple times recently. The bulls have defended this level so far, which is encouraging. However, the On-Balance Volume (OBV) has dropped significantly.

Heightened selling pressure in the spot market has caused the OBV to fall below its January lows, even as the price remained steady. This suggests that unless buying volume increases dramatically soon, HYPE might slip below the $18.5 support level.

Do Hyperliquid Metrics Suggest a Price Drop is Coming?

Data from Dune Analytics revealed that November and December recorded significant increases in daily volume on the Hyperliquid platform, along with a surge in new users. However, in January, the number of new users decreased.

Yet, over the last two months, the number of new users has stabilized rather than continuing to decline. Alongside this, daily trading volume has also stabilized instead of decreasing further.

These indicators suggest that the Hyperliquid platform continues to attract traffic despite challenging market conditions and negative sentiment.

The generated fees also support this view. Compared to late December, fee generation has increased—an effect of higher volumes. However, this might not directly reflect increased demand for HYPE due to the current fearful market sentiment.

Lastly, over the past ten days, Open Interest has gradually trended lower, indicating a reduction in speculative activity and suggesting sidelined traders and bearish sentiment.

A HYPE price drop below $18.5 may be likely, especially if Bitcoin falls below the $80k psychological threshold again. If market sentiment improves in the coming days, HYPE bulls might manage to defend the $19 support zone.