Hyperliquid's native token, HYPE, has surged nearly 8% over the past week, outperforming many top-20 cryptocurrencies. This rally coincides with the protocol reclaiming its dominance in the perpetual futures market. Data from CoinMarketCap shows Hyperliquid now commands a 19.5% market share with 24-hour trading volumes reaching $4.9 billion.
Its main competitor, Aster, has seen its share drop below 15% with $3.7 billion in volumes during the same period. The competition between the two platforms is intensifying, with Aster reportedly preparing to launch its own blockchain to directly challenge Hyperliquid's architecture.
A key driver behind HYPE's recent price action is the protocol's aggressive token burn mechanism. Earlier in December, as part of its Hyperliquid Assistance Program, the platform burned over $90 million worth of HYPE tokens. This initiative uses a portion of trading fees to permanently reduce the token's circulating supply, creating deflationary pressure. The program's effectiveness is underscored by the platform's substantial fee generation, which totaled nearly $100 million in November alone according to DeFi Llama.
From a technical analysis perspective, the 4-hour chart indicates HYPE has been trading within a descending price channel since October 30. The price is currently approaching the channel's upper boundary, which aligns with the 200-period Exponential Moving Average (EMA), a significant technical level. The Relative Strength Index (RSI) sits at 54 and is trending upward, suggesting building positive momentum. Analysts posit that a decisive break above the 200 EMA could signal the start of a recovery, with a potential near-term target of $40—representing a 55% upside from current levels.
