Unpacking $HYPE’s Price Action: A Bearish Dip with Bullish Potential

On April 10, 2025, at 23:32 UTC, DeFi Monk shared a detailed analysis of $HYPE, the token tied to Hyperliquid, a decentralized perpetual futures exchange. The post, which you can read here, dives into the recent price action of $HYPE, the broader market context, and the potential for a rebound. Let’s break it down in simple terms and see what it means for investors and crypto enthusiasts.

Why Did $HYPE Crash?

DeFi Monk starts by pointing out that $HYPE had a wild ride. Many investors made significant profits during its earlier rally, but when the broader crypto market turned bearish, $HYPE took a steep hit. According to DropsTab, $HYPE was showing bearish signs against top cryptocurrencies, with its price sitting at $12.17 as of recent data. This decline wasn’t just market-driven, though. DeFi Monk highlights two other factors:

• HLP FUD (Fear, Uncertainty, Doubt): Rumors or concerns about Hyperliquid’s HLP (likely referring to its liquidity provision or staking mechanism) spooked some investors.
• Overblown Expectations for HyperEVM: HyperEVM, Hyperliquid’s Ethereum-compatible blockchain layer, was hyped up but underperformed on its initial launch day. As Mint Ventures noted in January 2025, HyperEVM hadn’t even launched on mainnet yet, so the market might have expected too much too soon.

Despite the dip, DeFi Monk remains optimistic. Hyperliquid’s core metrics—like trading volume and fees—have held up better than any other blockchain or app in the crypto space. This resilience suggests $HYPE could be a strong contender for a recovery.

Hyperliquid’s Strengths: Why $HYPE Could Bounce Back

DeFi Monk believes Hyperliquid isn’t yet a consensus pick outside of Crypto Twitter (CT), meaning it’s still under the radar for many investors. This creates an opportunity for sidelined buyers—especially large ones like institutional investors—who are waiting for a clear price bottom to jump in. Here’s why they might be eyeing $HYPE:

1. Strong Fundamentals Amid a Bear Market

Hyperliquid’s trading volume and fees have stayed robust, even as other chains struggle. This is a big deal because it shows real user activity and demand. For context, Mint Ventures reported that Hyperliquid’s average daily spot trading volume was around $400 million, placing it among the top ten decentralized exchanges (DEXs) alongside names like Curve and Orca.

2. HyperEVM’s Untapped Potential

HyperEVM, Hyperliquid’s Layer 1 blockchain, is designed for speed and scalability, supporting Ethereum-compatible apps with sub-second finality (meaning transactions settle almost instantly). While its initial performance disappointed, DeFi Monk argues that the market has already priced in this underperformance. Any positive updates—like a successful mainnet launch or new apps built on HyperEVM—could be a pleasant surprise for investors, potentially driving $HYPE’s price up.

3. Expansion Plans and Market Dominance

DeFi Monk lists several catalysts that could fuel $HYPE’s growth:

• More Spot Tokens: Hyperliquid’s addition of spot tokens like $uBTC has been a success, and more could be on the way. This expands the platform’s offerings beyond perpetual futures (perps), attracting a broader user base.
• Builder Codes: These are likely incentives or tools for developers to build on Hyperliquid, which could lead to more decentralized finance (DeFi) apps and activity on the chain.
• Dominance in On-Chain Perps: Hyperliquid currently holds an “absurd” market share in the on-chain perps market, with no real challengers. This dominance gives it a strong foothold in DeFi trading.

Replies to the post echo this optimism. For example, Glass noted that HyperEVM could thrive once a grant system is implemented to incentivize developers, while GreenGeorgeHL mentioned upcoming precompiles on mainnet and potential exchange listings on platforms like Kraken.

Challenges and Risks: Institutional Access and Macro Factors

Despite the bullish outlook, there are hurdles. Lillipose pointed out that $HYPE isn’t widely available for large institutional buyers or family offices, except through Fireblocks, which supports HyperEVM integration. DeFi Monk confirmed this, noting that many funds can’t buy $HYPE yet due to mandate or security concerns. However, this limitation also signals that $HYPE is still early in its adoption curve, with room to grow as more institutions gain access. A Medium article by Vaeta Family Office highlights how Hyperliquid’s partnership with Fireblocks could bridge this gap by enabling security token implementation and providing institutional-grade compliance tools.

On the macro side, DeFi Monk adds a caveat: $HYPE’s short-term performance could be derailed if global markets take a hit. Specifically, they mention the risk of former President Donald Trump “destroying global free market capitalism.” This ties into broader crypto market concerns under Trump’s administration. According to CNBC, Trump has already impacted crypto by withdrawing SEC rules like SAB 121, which could boost institutional adoption, but his policies—like launching a meme coin that saw a 50% drawdown—have also introduced volatility.

What’s Next for $HYPE and Hyperliquid?

DeFi Monk’s analysis paints a picture of a token that’s been beaten down but has strong fundamentals and growth potential. The combination of Hyperliquid’s market-leading position in on-chain perps, HyperEVM’s future developments, and the possibility of institutional inflows makes $HYPE a name to watch. However, external risks—like regulatory shifts or global market disruptions—could overshadow its technical strengths.

For now, DeFi Monk advises caution with a “NFA” (Not Financial Advice) disclaimer, reminding us that while the early signs of a $HYPE recovery might be here, the broader market environment will play a big role. If you’re interested in $HYPE, keeping an eye on HyperEVM’s progress and institutional adoption trends could be key to timing your next move.

What do you think about $HYPE’s future? Let’s discuss in the comments!