Hyperliquid Price Analysis Ahead of the $8.5 Billion HYPE Unlock

Hyperliquid price has crashed by 40% from its highest level this year. Also, technicals point to more downside after forming a risky pattern. HYPE token will be at risk as the network unlocks tokens worth billions. Its market share is easing, adding more pressure.

Hyperliquid Price at Risk as a Bearish Pattern Forms

The daily chart shows that the Hyperliquid price has been in a strong bearish trend in the past few months. It has dropped from a high of $60 in September to the current $36. This mirrors the performance of other tokens.

HYPE token is now hovering near the 50% Fibonacci Retracement level. This retracement is drawn by connecting the highest and lowest levels this year.

The HYPE token has slowly formed the highly bearish head-and-shoulders pattern. It is one of the most common bearish reversal signs in technical analysis. This pattern’s head is at $60, while the shoulders are at $50. It is now hovering near the neckline of this pattern.

Hyperliquid token remains below the 50-day and 100-day EMA and the Supertrend indicator. Therefore, the token will likely have a bearish breakdown, potentially to the next key support level at $25.

It is about 30% below the current level. On the other hand, a move above the resistance at $45 will invalidate the bearish outlook.

Big HYPE Token Unlocks Ahead

One of the main risks facing the Hyperliquid price is that it will unlock billions of tokens later today. Data compiled by DeFiLlama shows that there will be tokens worth over $8.5 billion in token unlocks. It’s a notable figure for a coin worth $12 billion.

According to CMC, HYPE has a maximum supply of 1 billion tokens and a circulating supply of 336 million. This means that hundreds of millions of tokens will be unlocked in the coming years until 2034.

Token unlocks are usually bearish as they increase those in circulation. This situation is usually worse when a coin is facing more fundamental and technical challenges.

Crypto projects normally offset the token burns by either buying back their coins or burning them. Hyperliquid does both. It has already burned over 504k HYPE tokens worth over $18 million.

At the same time, Hyperliquid uses the fees it generates to buy back its tokens. It bought tokens worth over $1.35 million in the last 24 hours and $20 million in the previous seven days.

Token Unlocks and Buybacks Shape Hyperliquid Price

Hyperliquid faces another risk. The volume in its perpetual futures exchange has dropped. It has fallen sharply in the past few weeks.

It has also lost its commanding market share to other companies like Lighter and Aster. This is a move that will impact its revenues and fees.

DeFiLlama data shows that Hyperliquid’s perpetual futures volume stood at over $262 billion in the last 30 days. In contrast, Aster processed tokens worth $280 billion. Lighter had the biggest market share, handling over $298 billion in the same period.

These numbers are notable as Hyperliquid was recently the most dominant player in the perpetual futures industry. Meanwhile, the volume handled on Hyperliquid has also fallen.

It handled trades worth $232 billion this month, down sharply from the year-to-date high of $396 billion. This drop is likely because of the crypto market crash and the decline in futures open interest.

All this slowdown has negatively impacted Hyperliquid’s revenue. This slowed to $86 million this month from $105 million in October this year.

Hyperliquid price has remained under pressure in the past few months. This pullback may continue this year as it has formed a risky head-and-shoulders pattern on the daily chart. It is also losing market share in the perpetual futures industry that it used to dominate.