HYPE, the Hyperliquid token, has experienced a significant price decline, falling below the $20 mark as selling pressure from team token unlocks and large holder sales overrides the project's strong fundamentals. The token, which traded in the low-$20 area earlier this week, has continued its downtrend from prior highs with elevated volume indicating active participation from sellers.
According to analysis from Altcoin Sherpa, HYPE built its reputation throughout 2025 as a reliable asset due to strong fundamentals, an active community, consistent cash flows, and excellent product-market fit. These characteristics made it a frequent choice during market pullbacks, with traders viewing it as offering comparatively strong downside protection. This positioning led to HYPE becoming widely held, reducing the need for active decision-making during dips and reinforcing its role as a default allocation rather than a speculative trade.
The recent decline is attributed not to deteriorating fundamentals, but to supply-side pressure. Team token unlocks and sizable sellers are currently active, introducing persistent overhead supply that the market is struggling to absorb. The longer-term chart reflects this dynamic, showing a clear transition from a broad topping structure into a prolonged downward move.
On the lower-timeframe chart, HYPE is trading near $22 after a sharp drop, with the market structure reflecting a phase of distribution and inventory absorption. Altcoin Sherpa notes that this environment could allow the drawdown to extend while these sellers remain present, especially given a generally weak backdrop for Bitcoin, which tends to weigh on altcoin sentiment more broadly.
Despite the ongoing retracement, analysts emphasize that HYPE's underlying fundamentals have not changed. The current price action reflects a phase of distribution and supply clearance rather than a breakdown in the project's long-term outlook. The charts suggest that the market is working through excess inventory, with price adjusting lower to facilitate that process before a more stable structure can emerge. The price is expected to stabilize once inventory clearance is complete.
