Analysis of Recent Hyperliquid Token Unlock: Impact on Price?

The Hyperliquid decentralized exchange (DEX) team recently announced the unlocking of 1.75 million HYPE tokens for its developers and core contributors. This release is valued at over $60.4 million as of today.

Key Takeaways:

Hyperliquid unlocked 1.75 million HYPE tokens for development, valued at $60.4 million.
Concerns about market price drop arose, with HYPE price declining 4.6% post-unlock.
The airdrop and token generation event marked a significant shift towards community-focused models.
HYPE has fallen 42% from its September peak, currently trading below critical support levels.
The market may have already anticipated the price pressure from token unlocks.
Hyperliquid continues to be recognized for its impressive trading volumes.

Hyperliquid Token Unlock Analysis

This token unlock, which was previously disclosed, is part of HYPE’s vesting schedule. The pseudonymous developer, iliensinc, noted this milestone while marking the first anniversary of Hyperliquid’s landmark airdrop and token generation event.

iliensinc Celebration

The announcement raised concerns regarding potential selling pressure that could affect HYPE’s market price, which has seen a drop of approximately 4.6% at this time.

Hyperliquid's airdrop and token generation event marked a significant moment in the crypto sector by shifting the focus toward a community-oriented model, rewarding early users and developers rather than simply providing benefits to venture capitalists.

Related: Trader spends $3M to create a $5M deficit in Hyperliquid’s vault

Are Hyperliquid’s Token Unlocks Already Factored Into the Price?

Arthur Hayes, founder of the BitMEX crypto exchange, emphasized the uncertainty surrounding the team’s intentions regarding token sales, indicating that even promises to refrain from selling could be unreliable.

He suggested that HYPE token holders ought to anticipate a continuous possibility of daily selling pressure, which the market has likely already taken into account, evident in HYPE’s price drop since September.

Since hitting an all-time high of approximately $59.40 in September, HYPE has decreased around 42%. Current trades indicate that it is well below its 200-day moving average, a crucial support benchmark.

HYPE Price Trend
HYPE’s price trajectory demonstrates a consistent increase, peaking in September, followed by a downturn. Source: TradingView

HYPE began to decline on September 19, just before the significant market crash in October, which led to some altcoins losing up to 95% of their worth.

During the market crash on October 10, the token experienced a one-day drop of roughly 54% but managed to recover to the $40 mark within 48 hours post-crash.

Analysts and industry professionals have commended Hyperliquid for its revenue growth and ability to manage $330 billion in monthly trading volume, all from a relatively small development team.

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