Since the beginning of the year, HYPE has shown a superior trend compared to the overall crypto market, evidenced by its intrinsic value and external factors. According to the analysis of the funds from liquidation fees, the price of HYPE tokens has grown well.
How long can HYPE maintain its superior momentum? Data from on-chain and the market will provide a deeper insight, helping to clarify HYPE's prospects in the current volatile market context.
The factors behind Hyperliquid's outstanding performance in the market
In the context of continuous capital outflows from the global crypto market, HYPE goes against the trend by maintaining a significant amount of capital. Specifically, according to data from TradingView, since mid-last month, the total market capitalization of the crypto market has sharply decreased from $3.2 trillion to about $2.2 trillion. In stark contrast, the price of HYPE during the same period has increased by 60%, from $20.6 to $33.6.
Reports from Grayscale indicate that the growth in derivative trading volume for HIP-3 on Hyperliquid is one of the main drivers pushing HYPE's price. At the same time, Grayscale Research also notes a boom in perpetual futures trading for non-crypto assets on this platform, with an average trading volume over 7 days exceeding $900 million.
Additionally, Ripple Prime has opened up access for institutions to Hyperliquid's on-chain derivative tools, thereby improving liquidity and boosting the platform's acceptance on a broad scale.
Another notable milestone occurred on February 5, exactly when market sentiment hit a fear bottom for the year. Coinba.s.e officially listed HYPE, helping this token maintain stability despite a strong sell-off wave across the entire crypto market.
Being listed on a major exchange like Coinbase has brought ample liquidity and stable demand, attracting both retail and institutional investors. As a result, HYPE not only absorbs selling pressure well but also continues to maintain its price increase while most of the market is declining.
In addition, HYPE's listing on Coinbase may serve as a stepping stone for HYPE spot trading ETFs to begin operating as Coinbase is the custodian and helps North American investors access HYPE.
Some analysts even argue that HYPE's absence on Binance is an advantage. According to investor MartyParty, HYPE is currently one of the few large L1 projects not caught up in liquidity hunting on Binance, thus avoiding the large-scale sell-offs often seen.
Why does more liquidation in the market help HYPE grow?
The dynamics of HYPE's growth do not just come from natural demand. Data from Coinglass shows that out of over $2.6 billion liquidated within 24 hours, Hyperliquid accounted for over $630 million, slightly lower than Byb.i.t but exceeding Binance.
Large liquidation events indirectly support HYPE's price through the token buyback mechanism from trading fee revenue. When trading volume increases, strong market volatility leads to increased liquidation events, resulting in higher fee revenue for the platform.
Data from DefiLlama shows that on February 5, Hyperliquid generated $7.49 million in trading fees and $6.84 million in revenue – the highest level since the market crash on October 10 last year.
With most crypto projects, a market crash means plummeting revenue. However, due to the nature of a derivatives exchange, Hyperliquid directly benefits from strong volatility and liquidation events, thereby creating positive momentum for HYPE's price.
According to Hyperscreener, more than 160,000 HYPE tokens were repurchased on February 5, the highest number since the sell-off on October 10.
This mechanism gives HYPE a distinctive advantage, helping the token somewhat resist negative pressure from the overall market.
However, focusing solely on positive factors may cause investors to overlook potential risks. On February 6, approximately 9.92 million HYPE tokens will be unlocked. At the same time, the bearish sentiment in the market may persist, weakening the impact of growth catalysts.
The latest data from Binance shows that the price level of $30 plays a crucial role. Whether the price holds above or loses this threshold will be an important basis for evaluating HYPE's next direction in the coming month.
