Hyperliquid (HYPE) Projected to Reach $190 in Optimistic Market Capture Scenario

Decentralized exchange (DEX) Hyperliquid (HYPE) has shown a significant rise in its key performance indicators, establishing itself as a preferred trading platform amid ongoing tensions in Iran. This uptick has led HYPE to outperform many of the leading cryptocurrencies in the market, achieving an impressive 23% increase over the past week. Nevertheless, market analyst Ali Martinez suggests that HYPE investors might soon have a new opportunity to buy.

Key Takeaways

Hyperliquid (HYPE) has shown a significant 23% gain over the last week.
The TD Sequential has shifted from a buy signal to a sell signal.
Market capture scenarios suggest the potential for HYPE to reach prices ranging from $60 to $190 based on varying market conditions.
The current price is undervalued compared to projected enterprise valuations.

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HYPE

New Sell Signal for Hyperliquid

On March 8, the TD Sequential indicator signaled a buying opportunity for HYPE, which was validated when the token surged by 28.23%, climbing from around $30 to a peak close to $38.53. However, as of March 13, the same indicator is now indicating a sell signal, leading Martinez to warn that rising selling pressure could result in a short-term decline to approximately $34.

Currently priced at $36.37, this would indicate a drop of about 6.5%, adding to a recent 2.5% pullback witnessed over the last 24 hours, according to data from CoinGecko.

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The daily chart displays HYPE's price recovery, followed by a decline to $36 on Friday. Source: HYPEUSDT on TradingView.com

Martinez believes this potential dip might present a strategic buying moment before any upward momentum returns.

Ambitious Projections for HYPE

Enhancing the positive outlook for this altcoin, research firm DCo has introduced a new valuation framework for HYPE. They modeled four scenarios based on the market capture potential of the $1.74 trillion daily Total Addressable Market (TAM) that Hyperliquid may reach through its HIP-3 protocol.

Using a three-year discounted cash flow (DCF) model, each scenario anticipates a gradual capture rate: 20% in Year 1 (2026), 50% in Year 2 (2027), and 100% by Year 3 (2028), illustrating the gradual progression of market share expansion.

In a more pessimistic outlook, where Hyperliquid captures only 0.01% of the market, HIP-3 could generate $32 million in annual fees at full capacity based on the adjusted TAM. When this revenue is combined with a baseline projected revenue of $1.35 billion and the terminal value from Year 3, the DCF estimates an enterprise value of roughly $18 billion, potentially allowing HYPE to reach a price point of $60 per token.

Under a base case scenario of 0.10% market capture, Year 3 revenue from HIP-3 would increase to about $322 million, leading to a total revenue estimate of approximately $1.7 billion and an enterprise value nearing $22 billion, suggesting a token price of around $72.

In a more optimistic scenario, with a capture rate of 0.50%, Year 3 HIP-3 fees would hit $1.6 billion, contributing to total revenue of $3 billion. This would create an enterprise value of $38 billion, equating to an implied price of about $124, which corresponds to a fully diluted valuation of approximately $124 billion.

The most hopeful scenario, assuming a 1.00% market capture, predicts total Year 3 revenue of $4.6 billion, resulting in an enterprise value of $59 billion and potentially valuing HYPE at $190.

DCo's analysis indicates that, even with a standard 20% discount and a 20x multiple, the current price of $37 is substantially lower than the bear case valuation of $60. This implies that the market has not entirely recognized the potential contributions from HIP-3 and is undervaluing Hyperliquid’s crypto exchange business.