Bitcoin's influence on HYPE appears significant, suggested by positions held by prominent Bitcoin users on Hyperliquid.
Hyperliquid's Native Asset, HYPE, Remains Tied to Bitcoin's Performance
In the past 24 hours, Hyperliquid's native asset, HYPE, dipped 2.77% to trade at $33. Despite this temporary pullback, analysis suggests that HYPE's performance is closely linked to Bitcoin's market strength.
The correlation between the two assets is far from coincidental. Large Bitcoin holders, often referred to as whales, frequently open long trades using HYPE on the Hyperliquid platform. This relationship amplifies HYPE's sensitivity to Bitcoin's price action [1][5].
In instances of a Bitcoin rally, HYPE tends to follow suit with strong upward momentum. For example, HYPE saw a 14.72% surge in a single day as BTC rose, mostly due to a significant $1.07 billion BTC long position on Hyperliquid and heightened trading activity [5]. Conversely, a decline in Bitcoin's price can lead to pullbacks or losses in HYPE, as observed during a Bitcoin downturn when a Hyperliquid Bitcoin whale incurred a loss of $100 million [2][1].
In addition to this correlation, rising liquidity inflows and increased DEX trading volume on Hyperliquid could fuel further gains for HYPE when Bitcoin is strong. Enhanced market activity and investor confidence drive demand for HYPE [1][5]. Furthermore, staking yields and cross-market correlations, such as those with crypto-related stocks like Coinbase, indicate that broader positive sentiment in the crypto sector benefits HYPE [4].
Interestingly, Hyperliquid's annualized trading fees currently stand at $777 million, representing a 52% increase over the past 30 days [6]. This substantial increase suggests that more users are actively participating in the platform. Additionally, the Total Value Locked on Hyperliquid increased from $289.46 million at the start of May to $505.41 million [6].
While daily transactions and active users have shown a decline, this could be a positive sign. The dip in DEX volume, coupled with reduced transactional activity, suggests that most addresses are holding onto HYPE, rather than selling [6]. This could indicate that selling pressure has subsided, and buying activity may soon resume.
Sources:[1] Decrypt[2] The Block[3] Cointelegraph[4] Messari[5] TradingView[6] Artemis[7] DeFiLlama
- The performance of Hyperliquid's native asset, HYPE, is closely linked to the market strength of Bitcoin, often leading to similar price action in both assets.
- Large Bitcoin holders, or whales, frequently open long trades using HYPE on the Hyperliquid platform, amplifying HYPE's sensitivity to Bitcoin's price action.
- In addition to its correlation with Bitcoin, HYPE's value can be influenced by factors such as rising liquidity inflows, increased DEX trading volume, and positive sentiment in the crypto sector, including cross-market correlations with crypto-related stocks like Coinbase.
- The substantial increase in Hyperliquid's annualized trading fees and Total Value Locked over the past 30 days indicates that more users are actively participating in the platform, potentially signaling a resumption of buying activity.
- Despite a recent decline in daily transactions and active users, the decrease in DEX volume and reduced transactional activity may suggest that selling pressure has subsided, as most addresses are holding onto HYPE, rather than selling.
