Hyperliquid [HYPE] Plummets 22% Amid Sell-Offs and Slowing Buybacks
Hyperliquid [HYPE] has suffered a significant price drop of 22% from its July peak of $73, breaking a key trendline and prompting analysts to turn defensive. According to Michael Van de Poppe, now is the time to be 'passive' on the altcoin.
The loss of the uptrend means that I'm going to be more passive on a potential trade, he said in an interview. Last time this occurred, the price fell from €50 to €15, suggesting a possible deeper correction.
Analysts warn of a potentially 38% pullback to the monthly demand zone near $35, but some believe that this could be a buying opportunity at lower prices.
The decline in HYPE's value can be attributed to several factors, including the fading institutional demand from U.S Spot HYPE and the sell-offs by venture firms like a16z and Multicoin Capital. The trading activity has also slowed down since June, cutting revenue by 3x from $21M to $7M.
As a result, the pace of HYPE buybacks has been impacted, with the daily average decreasing from 318K tokens in early June to 108K tokens in late July. This is about 20K HYPE on a daily average, which may not be enough to absorb the ETF sell pressure.