Hyperliquid's native token, HYPE, which has been on an upward trend over the past few days, saw a 20% price drop today, trading at $26.54, while the market cap fell below $9 billion.

excess fluid (The noise) reached a record high of $34.96 on December 22, up from its airdrop listing price of $11 and generating a cumulative gain of nearly 200%. Its market capitalization exceeded $11.5 billion at the time, securing a place among the top 20 coins by market cap, according to CoinGecko.

Launched in June 2023, Hyperliquid DEX has gained traction due to its innovative approach to eliminating gas fees for transactions. The platform offers low fees on perpetual contracts and trade slots, with revenue reinvested into the ecosystem through token buybacks or by supporting ecosystem coffers.

HYPE price rose after one of the highest prices Symbolic weather projections are expected Of the year. Hyperliquid distributed 310 million tokens to its users, representing the largest airdrop in cryptocurrency history.

However, the altcoin's price faced a setback due to growing concerns within its community, making HYPE the most popular coin on CoinGecko. HYPE fell 26% from its all-time high reached yesterday, hitting an intraday low of $25.77 on De. 23. This decline brought its market capitalization down to $8.87 billion, making it the 23rd largest cryptocurrency asset at press time.

Why HYPE tank?

HYPE price dropped after community members I noticed A large whale, identified as user X laurentzeimes, began selling over a million HYPE tokens.

The sell-offs were executed using Hyperliquid DEX's TWAP (Time Weighted Average Price) mechanism, which splits large orders into smaller transactions over a specified period to minimize slippage. So far, under the ongoing TWAP execution, the whale has sold 175,000 tokens.

The whale sell-off coincided with concerns about North Korean hackers actively trading on the platform, as cybersecurity expert Taifano predicted at X mail This activity may be an attempt to test a vulnerability in Hyperliquid's security.

The expert noted that the issue is particularly worrying given that Hyperliquid operates with only four validators, raising further concerns.

Following this discovery, Hyperliquid saw over $42 million in USDC outflows – the largest since its launch – potentially exacerbating HYPE's year-over-year price decline. Data From Dune Analytics.

However, analysts remain optimistic despite the recent stumbles, and expect HYPE to resume its rise and possibly reach a new all-time high.

On December 23 mailAnalyst CJ, who has 92.8K followers, expressed an upbeat outlook for HYPE, suggesting that it could rally towards the $40 target if it clears the key resistance level of $30-32.

He noted that although the short-term trend may appear bearish, a decline to $18-22 could provide traders with a strong buying opportunity. However, CJ added that if HYPE price rebounds to around $32.3 in the coming days, it would invalidate his forecast.

Previously, crypto.news analysts anticipation A similar price target, noting that HYPE needs to rise above its all-time high at $34.8 to confirm an upside breakout, potentially reaching $40.

These expectations are supported by Hyperliquid's strong performance in the DeFi sector, leading the decentralized perpetual trading market with a weekly trading volume that peaked at $98.6 billion last week and a TVL value that recently surpassed $3.4 billion for the first time this month, up from $188 million. In October.