Hyperliquid Activity Cools Down As Derivatives Demand Shifts

Hyperliquid has no doubt carved out its place in the crypto market so far in 2025. Especially judging by the sheer volumes that it was able to achieve over the last few months. However, recent data revealed a slowing pace of activity in Hyperliquid.

While the market recently experienced a bit of a DeFi resurgence, Hyperliquid DEX volumes retreated. Especially compared to highs seen in May and June.

According to DeFiLlama, Hyperliquid DEX volume peaked above $714 million in May and above $735 million just before mid-June. Daily volume tanked as low as $134.8 million towards the end of June.

DEX volume each day for the last 2 days averaged $270 million. This still highlighted a significant dip in volumes from the aforementioned highs by roughly a third.

Interestingly, this comes amid a rise in DEFI activity on some of the legacy DEXes such as PancakeSwap. This highlighted its pullback in the midst of heavy competition from rivals.

Hyperliquid Token Volume Grew Despite Declining DEX Volume

Hyperliquid token volume also experienced a substantial surge on a YTD basis. For context, it peaked above $1.5 billion in December 2024 but has since surged above $1.93 billion. This meant it was up by over $430 million from early December.

The token volume was a reflection of the network’s DEX volume, considering that it highlighted the broader picture since December. In this regard, DEX volume also saw a significant surge.

It is, however, worth noting that the declining DEX volume was a more recent phenomenon, and it had a pretty good explanation.

It turned out that Hyperliquid volumes were mostly driven by the demand in the derivatives segment.

Especially during times when market appetite for leverage was high. This was particularly the case for large whales. However, volatile price swings over the last few weeks resulted in significant liquidations as seen by heavy losses by whales such as James Wynn.

As a result, appetite for leverage took a hit. In the meantime, the surge in demand for traditional DEXes like Pancakeswap also confirmed that there was heavy spot demand in DeFi. Perhaps even an indication of growing focus on long-term HODLing.

Despite the data points, Hyperliquid still represented a very small percentage of the DeFi segment. About 0.1% of the total market, and it was positioned 31st among DEXes ranked by token volume.

Why HYPE Price Action Could be at Risk of a Major Retracement?

The HYPE token delivered an impressive performance in Q2 2025. It pulled off an impressive 390% upside from its lowest to highest price levels during the quarterly period.

The bullish performance was in line with the surging token volume. However, HYPE bulls showed signs of exhaustion since mid-June, as indicated by its limited upside since then and the declining RSI.

Although there were signs of bullish exhaustion, HYPE’s MFI (Money Flow Index) registered a robust uptick in the last 5 days. This observation confirmed that there was significant liquidity injection.

It was possible that this outcome could have been due to recovering bullish expectations. Notably, the token’s performance indicates that most holders were in profit. So, there could be an incentive to take profits.

On the other hand, token volume was still significantly high, which may explain the sustained demand. This means that the demand for HYPE was significantly influenced by its network activity, beyond just speculation.

While a profit-taking induced pullback could be in the cards, the impact of network demand could potentially water down the bears and limit their influence.

However, it was worth noting that many other factors could still influence market direction in July and beyond.