In the volatile realm of cryptocurrencies, fortunes can turn in a heartbeat. What is more remarkable is HYPE Hyperliquid’s native token and its resilience throughout all these crypto market turmoil. Bitcoin and other cryptocurrencies are facing their toughest economic crisis yet. A complete opposite case can be said of HYPE which has flourished and seen a tremendous breakout. Let's look into the factors that have contributed to HYPE's impressive performance, examining its deflationary tokenomics, strong community support, and the team's proactive approach to challenges.

Deflationary Tokenomics Fueling HYPE's Ascent

We’re one of the first projects to implement effective deflationary tokenomics, and that’s one of the core drivers behind HYPE’s resilience. Opposed to many cryptocurrencies that deal with inflation, HYPE is actually built to be scarcer over time. If found, this scarcity would increase its value dramatically. This deflationary mechanism is accomplished through a careful balance of buybacks and token burns.

More than 80% of Hyperliquid’s profits are immediately put to work burning HYPE and reducing the supply. Further, 54% of the platform’s gross profit is used to buy back and burn HYPE. Astonishingly, 100% of its net profit goes to supporting the work of these churches as well. This aggressive approach to supply reduction has seen a significant amount of HYPE off the streets. So far, just over $100 million USD worth of HYPE have been returned through the buybacks, totaling an extraordinary $318.77 million USD returned to date.

The Assistance Fund (AF) is an important part of making that happen. The AF has seen over 77 million in USDC inflows. In fact, over the last month, they raised over 25 million all by themselves! That would mean an average daily buyback of around $1 million in HYPE. The AF currently owns 1.16% of the total $HYPE supply. Additionally, it governs 3.74% of the circulating supply, making its impact on the token’s scarcity even more significant.

Community Strength as a Foundation for Stability

Even more than its clever tokenomics, it has been its strong and engaged community that has played a crucial role in Hyperliquid’s resilience. A well-distributed token supply and active community management have fostered a sense of ownership and collective responsibility among HYPE holders.

The $HYPE token allocation at our TGE (Token Generation Event) was intentionally structured to create an alignment of incentives. A big change was that 31% of it was directed to the community. This wide distribution was key to generating an ownership stake that inspired meaningful, active participation in the Hyperliquid ecosystem.

That support has been especially important as we’ve gone through times of extreme market volatility. The same community pulled together in late 2024, as fears over a possible cyber raid by North Korea–affiliated hackers triggered outflows. Fighting as one, they collectively produced enough selling pressure to shore up the price of the token. In looking back on these actions, it is clear that this tremendous collective action had a unique power to overcome and minimize the negative impact of the bad event. The community was really active on the platform, and their participation was certainly appreciated. After all, they were the ones who had earned these carefully designed incentives such as staking rewards, which further engendered their community and loyal following. The community's ownership and involvement in the platform helped to create a sense of reliability and trust, which was essential during market volatility.

Navigating Challenges: The "Jelly Incident" and Team Response

Every project has its struggles, and Hyperliquid is still in its infancy. The “Jelly incident” unleashed a storm of fear, uncertainty, and doubt across the platform. It was a genuine gauge both for the team’s responsiveness and the community’s faith in them. It was the Hyperliquid team’s lack of panic and precise communication that largely calmed the fears that had taken hold and reassured traders.

While specific details of the "Jelly incident" aren't provided, the key takeaway is the team's ability to address the situation head-on. The team made their process open and transparent. This proactive move calmed the community’s nerves and prevented the FUD from getting completely out of hand. It showed a clear commitment to the development of open channels of communication and a determination to confront challenges head-on.

Undoubtedly, the team’s prompt response in addition to the community support’s staunch resilience accounted for HYPE’s swift recovery in price. The incident served as a testament to the importance of a responsive team and a resilient community in navigating turbulent times.

HYPE's Price Performance: A Comparative Analysis

HYPE's recent price performance has been particularly noteworthy, especially when compared to Bitcoin's movements. And although Bitcoin continues to fluctuate himself, HYPE has consistently shown a bullish trajectory.

Since April 7, HYPE’s price has increased more than 50%. It raised from an all-time low of $9.29 and today sits around the $14-$15 mark. In comparison, Bitcoin was down about 1% during the same time frame, trading just under $60,850. This divergence is an important context for understanding HYPE’s relative strength amidst broader market uncertainty.

As great as HYPE’s performance looks, it’s worth looking at its performance relative to Bitcoin. HYPE is simply catching the wave of enthusiasm driven by Bitcoin finally breaking above $80,000. Far from being non-correlated, when BTC pumps, it usually drags altcoins up with it. This correlation means that HYPE's price is not entirely independent of Bitcoin's movements. If HYPE fails to breach resistance and the 4-hour bullish trend reverses, the $12 level becomes a key downside target, similar to how Bitcoin's price movement can impact altcoins.

HYPE is still trapped within a greater daily chart bearish trend. In stark comparison, BTC has moved straight up, consistently increasing MACD (Moving Average Convergence Divergence) and a positive CMF (Chaikin Money Flow) that indicates genuine uptrend buying power. HYPE's price has been influenced by Bitcoin's performance, with the $12 region seeing a growing concentration of liquidations over the past three days, similar to how Bitcoin's price can impact altcoins.

Technical Indicators Point to Potential Bullish Momentum

Examining technical indicators offers more information about HYPE’s possible future direction. Several indicators suggest a growing bullish momentum.

  • Directional Indicators: The +DI (Positive Directional Indicator) has surged from 18 to 29.1, while the -DI (Negative Directional Indicator) has declined from 21.8 to 13.5. This indicates a potential bullish reversal. Furthermore, the +DI has risen above the -DI, typically signaling a strong bullish momentum shift.
  • Relative Strength Index (RSI): The RSI climbing from 54.5 to 66 indicates growing bullish momentum that hasn’t yet reached extreme levels, suggesting there's still room for further growth.

These technical indicators, along with the fundamental factors we’ve touched on above, make for a rosy picture of bullishness for HYPE moving forward.

Hyperliquid's Revenue and Whale Activity

Beyond tokenomics and community support, Hyperliquid's increasing revenue and whale activity further contribute to HYPE's positive outlook.

In just 30 days since its launch, Hyperliquid has already accrued $47 million in fees, surpassing all top blockchains including Ethereum and Solana. This remarkable new revenue generation is a testament to the continuing adoption and usefulness of the platform.

Finally, from a whale activity perspective there are compelling signs of confidence in HYPE’s future. In the example above, a Hyperliquid whale longed HYPE with 20x leverage at $11.37 and is currently up about $1 million. This major investment from such a large player reflects, if you ask the folks at HYPE, a strong belief in HYPE’s continued growth.

All in all, Hyperliquid’s HYPE token has performed outstandingly despite the volatility in the market. Much of this strength is attributed to its deflationary tokenomics, strong community backing, a highly responsive team, positive technical indicators, rising revenue and active whale accumulation. With the rapid pace of innovation in the cryptocurrency space, HYPE’s distinct features make it a project to watch.