Hyperliquid’s native token, HYPE, has come under pressure recently, as a significant whale wallet offloaded 215,850 tokens at a reported $290,000 loss. This transaction further strained a market already showing signs of declining interest. HYPE, which recently hit an all-time high of $45.70 just three weeks ago, has since been stuck in a narrow range between $38 and $41, failing to attract new buyers or maintain momentum.

According to on-chain data, daily token trading volume for HYPE dropped to $143.3 million—the lowest it has been in over three months. This sharp decline suggests that both retail and institutional traders are stepping away, leaving the token in a low-liquidity environment that is more vulnerable to sharp moves when large holders decide to exit.

The recent whale sale stands out: Onchain Lens reports a single wallet unloading 215,850 HYPE for roughly $8.37 million, crystallizing a $290,000 loss. Selling such a large position at a loss often signals diminishing confidence among early holders—a clear shift from profit-taking to defensiveness. Weighted Sentiment metrics have mirrored this shift, falling to a monthly low of −1.229, reflecting pervasive bearish sentiment across social platforms.

The derivatives market paints an equally cautious picture. Perpetual contract volume for HYPE has dropped from a recent high of $8.7 billion to $2.436 billion, signaling reduced interest in leveraged speculation. Concurrently, the funding rate for these contracts has flipped negative (−0.0006), indicating that more traders are leaning bearish, betting on further price weakness.

Despite growing pessimism, the market remains lethargic. Per recent analysis from AMBCrypto, technical indicators such as the Stochastic RSI and Relative Vigor Index (RVI) suggest that HYPE is not actively trending but drifting. The Stochastic RSI has slid from 74.12 to 62.10, and the RVI is at a low 0.0917—both pointing to weakening price momentum and caution among market participants.

This lack of decisive direction often precedes either a breakdown or a short-covering rally. According to the analysis, if bearish indicators persist and spot buying fails to return, HYPE could slide further—potentially testing support at $36.80. On the other hand, a sudden return of spot buying interest could fuel a short squeeze, pushing HYPE back toward $41. The next few trade sessions may therefore prove pivotal.

When large whales exit at a loss, it often triggers a ripple effect. Other traders may panic and sell to avoid deeper losses, exacerbating price declines. But liquidity levels matter; in low-volume environments like the current one, even modest new inflows could reverse the mood quickly. As such, the market is in a precarious position where small shifts in sentiment could have outsized effects.

Despite the current downtrend, Hyperliquid has had periods of strong momentum earlier this year. In March, the platform surpassed $1 trillion in perpetual contract volume while maintaining over 60 % market share in DEX perps, according to DeFiLlama—robust growth that underscores its long-term potential reddit.com+15hawkinsight.com+15themarketperiodical.com+15. More recently, in June, whales accumulated approximately $3.5 million worth of HYPE tokens through spot purchases, indicating periodic interest from large holders themarketperiodical.com.

However, such pockets of enthusiasm have failed to translate into sustained price gains, partly due to the volatile token distribution schemes and periodic controversies. For instance, a major JELLY token delisting event triggered by Hyperliquid’s validators drew scrutiny over its governance model. That incident coincided with a ~16 % price drop in HYPE fxleaders.com+1reddit.com+1. These kinds of governance shocks have occasionally undercut investor confidence.

The token’s on-chain metrics reinforce this uncertainty. Total value locked (TVL) for Hyperliquid is down roughly 20 % year-to-date, currently hovering near $1.89 billion—its lowest since January. This TVL erosion partly explains the drop in on-chain activity and volume fxleaders.com+1beincrypto.com+1ainvest.com+15beincrypto.com+15themarketperiodical.com+15. The drop in HYPE perpetual volume further supports the idea that trader interest is cooling even if the platform maintains significant technical power.

Without reliable catalysts, such as renewed whale accumulation or positive ecosystem updates (e.g. new listings, product introduces, or partnerships), HYPE may continue to trend carefully sideways—or drift lower—until broader sentiment shifts. Given its recent whale departures and collapsing volume, the token is unlikely to rebound sharply without fresh inflows.

In summary, the recent whale dump and declining trading volume signal a cautionary environment for HYPE. Bearish positioning in derivatives further tilts the bias lower, though the market remains range-bound, leaving the door open for a short squeeze if conditions change. For now, caution rules, and the next key support level at $36.80 will be closely watched by bargain hunters and technical traders alike.