Hyperliquid breaks $59, then dips 4% – Can HYPE rebound?

Key Takeaways

Why are institutions accumulating HYPE?

Institutions, specifically DATs, have acquired about 6% of the total circulating supply of HYPE.

What is influencing current price action?

The current bullish price action could be attributed to institutional inflow, DEX trading volume, and TVL.

Hyperliquid [HYPE] made yet another peak at $59.38, becoming one of the highest gainers in crypto. However, the altcoin was trading at $56, dipping 4.31%, at press time.

The Hyperliquid project has achieved several major milestones, particularly in securing institutional backing and advancing its ecosystem development.

While only a few institutions have established Digital Asset Treasuries (DATs) for the altcoin so far, the ones that have are noteworthy and impactful.

The DATs bubble

At the time of writing, data from DefiLlama indicated that Hyperliquid Treasury Holdings accounted for 6.811% of the total circulating supply, amounting to approximately 18.43 million HYPE tokens. 

Only 27% of the total supply had been unlocked, while 730 million HYPE remained locked, suggesting that the portion held by treasuries was still relatively modest.

This treasury-held amount was valued at $1.071 billion, based on a circulating market cap of $15.20 billion. Meanwhile, Token Terminal data showed that HYPE’s fully diluted market cap was on the rise, reaching $58.5 billion.

Among the major holders, Hyperliquid Strategies, formerly known as Sonnet BioTherapeutics Holdings, Inc., held 6.24% of the supply, while Hyperion DeFi, Inc. held 0.57%. 

Additionally, CoinGecko data revealed that Lion Group Holdings maintained a treasury balance of approximately 128,929 HYPE tokens.

Source: DefiLlama

The two main treasuries had returns of more than 5 times and have accumulated their holdings on average prices between $7.23 and $11.99.

In addition to the capital inflow from institutions, Hyperliquid was also performing well on its DEX trading platform.

Perpetual Futures, Spot Volume and TVL

The Hyperliquid DEX platform was emerging as a serious competitor to the already established exchanges with its impressive trading volumes.

The Perpetual Futures trading volume was at $328 billion in the last 30 days. Its DEX volume surged by 47%, reaching $8.91 billion in a week, while 24 hours trading volume was $1.125 billion.

By comparison, Perps volume (roughly $14 billion) was about 20 times that of Spot’s (about $700 million). Leverage from Perps trading drove the performance of the Hyperliquid platform.

Source: Blockworks

Additionally, protocols on the Hyperliquid chain were increasing in Total Value Locked (TVL), let alone the whole ecosystem. The TVL was at $9.25 billion, with Hyperlend accounting for $631 million.

HYPE hits record highs

On the charts, the price of HYPE made another new ATH for the second consecutive day. The Bollinger Bands had opened up, indicating volatility in the token trading.

Technically, price had broken above a rising wedge pattern that had consolidated for about a month. Levels above $60 appeared to be the next areas of interest for the altcoin holders.

Source: TradingView

In conclusion, as institutions continued to acquire more tokens, Hyperliquid gained greater visibility and exposure within the mainstream financial landscape.