#Hyperliquid #AsterDEX #lighter $
1. Contract Manipulation and Trust Crisis
In early 2025, HYPE maintained a relatively stable trend around 20u. By the end of March, the famous JELLYJELLY manipulation incident erupted. Someone opened a short position of about 6 million USD, which led to a significant increase in the JELLY price on the on-chain spot market (from 0.0095u to 0.06u), causing their position to be forcibly liquidated and transferring the losses to liquidity provider HLP (Hyperliquidity Provider). This incident threatened the safety of the HLP fund pool, and the validator network of Hyperliquid forcibly delisted the JELLY perpetual contract through on-chain voting, fixing the settlement price at 0.0095u (instead of the market price of 0.50u). This intervention triggered a severe credibility crisis at the time, with the market questioning the authenticity of its decentralization, leading to the coin price plummeting from its peak to 9u. Generally, intervention often signifies the bankruptcy of the exchange's credibility, resulting in a prolonged slump in coin prices.
But why didn’t it completely collapse? Because Hyperliquid publicly disclosed the profit and loss ledger of HLP and compensated most affected users (excluding manipulated addresses), proving that the intention behind the intervention was to protect the asset safety of the majority of liquidity providers, rather than malicious actions. In the end, 9u became the solid iron bottom of this cycle.
II. Value-driven, emerging from crisis
Surprisingly, HYPE did not sink from there. The official subsequently improved the isolation margin mechanism and liquidation logic to prevent such incidents from happening again. They took advantage of the expectations around HyperEVM's mainnet to regain market confidence. People gradually realized that, although JELLY's intervention raised controversies over decentralization, its original intention to protect HLP liquidity providers and the majority of users' asset safety was recognized by large holders, institutions, and long-term holders. After the incident, the platform's trading volume, open interest, and fee income all hit new highs, proving its product stickiness and actual resilience. With the prosperity of the HyperEVM ecosystem, HYPE showed strong valuation resilience: the price not only quickly recovered lost ground, steadily rising from a low of 9u but also surged to a historical high of 59.4u on September 18, 2025, completing a reversal from a crisis of trust to value discovery.
III. Fluctuation and decline under competitive encirclement
Entering October 2025, the market faced dramatic changes once again. On October 11, the market crashed and liquidated, with HYPE's price instantly touching 20u, recovering to around 50u by the 28th. This extreme volatility was essentially a large-scale turnover of chips. At that time, the official launched permissionless contract listing function, which greatly stimulated trading volume and buyback destruction, leading to shorts facing massive stampedes during the rebound, pushing the price back to high-level fluctuations.
However, the real challenge comes from the fierce market competition. By the end of 2025, a series of high-performance decentralized exchanges (DEX) such as Aster, Lighter, and EdgeX emerged one after another. Although Hyperliquid boasts high performance and transparency with its self-built L1, the logic for retail investors is very simple and straightforward: go where the cost is lower. The zero-fee policy launched by platforms like Lighter has accurately eroded Hyperliquid's existing market. Under the relentless pursuit of competitors, the premium of HYPE began to fade, and combined with a large amount of unlocking in the short term that might face tremendous selling pressure, the coin price fell from 50u all the way down, returning to the starting line of 20u again on January 22, 2026.
IV. Strong counterattack under extreme pessimism
When market sentiment fell to freezing point, and the 20u threshold was precariously positioned, Hyperliquid founder Jeff released a striking BTC trading depth comparison chart. The image showed that in terms of liquidity depth for core assets (such as BTC), Hyperliquid had the strength to compete with top centralized exchanges (CEX) like Binance. It re-demonstrated Hyperliquid's moat to the market: not relying on subsidies, but on an extreme trading experience and depth.
Crucially, the newly launched gold and silver contracts on the platform recently delivered impressive trading volume results, completely reversing the market's negative expectations. On January 29, 2026 alone, the trading volume of gold-related contracts (PAXG+GOLD) on Hyperliquid reached $323 million in 24 hours, while the silver (SILVER) contracts had a staggering 24-hour trading volume of $1.221 billion. The market has come to realize that Hyperliquid is not as weak as previously worried; its capacity and market recognition in contract business remain strong. Coupled with the technical aspect being in a severely oversold state, market pessimistic expectations being fully priced in, and the concerns about unlocking tokens not being massively dumped onto the market, actual selling pressure being lower than expected, under multiple resonances, the long-standing pessimistic sentiment quickly transformed into strong rebound momentum, driving HYPE to initiate a strong rebound.
V. Rebound or reversal? Challenges and opportunities coexist
In just two days, HYPE violently rebounded from 20u to 33u, an increase of over 50%. This wave of rebound has obvious characteristics of oversold repair and emotional rebound. However, it must be rationally acknowledged that the current situation of market share being eroded has not fundamentally changed, and solely relying on emotions to drive up will inevitably face selling pressure from profit-taking. The price has currently pulled back to around 27u, which reflects the market's reassessment of its long-term core competitiveness after the frenzy.
In addition, it is worth noting that the contracts for traditional financial (TradeFi) underlying assets recently launched are not Hyperliquid's exclusive advantage; other leading DEXs also have the capability to launch such assets. In the future, whether Hyperliquid can maintain its ultra-high liquidity depth in core assets and whether it can regain market share in the face of fierce market competition still requires continuous monitoring. Short-term rebounds do not alter the long-term competitive landscape; HYPE's trend depends more on ecological construction, fee income growth, and the consolidation of its core moat.
