The Hyperliquid token dropped to a crucial support level as volume on its perpetual decentralized trading platform slumped.
Hyperliquid reached a new all-time low of $12.10, which is a significant level considering that it had reached its previous low on March 13. As of December, its market capitalization was over $9.7 billion, but it has since slumped to $4.43 billion.
Data provided by DeFi Llama reveals that the volume of cryptocurrency exchanged on its network experienced a fall once more in the month of March. In January, it handled over $197 billion in volume, which is a decrease from February’s volume of $187 billion and January’s level of $197 billion.
The largest perpetual futures exchange in the market, Hyperliquid has already handled a cumulative volume of $1.16 trillion, making it the most successful exchange in the industry. Jupiter, which is its most significant rival, has managed a total volume of $268 billion.
All of the decentralized perpetual futures platforms saw a decrease in the overall volume of assets exchanged during the month of March. They handled over $275 billion in assets, which is a decrease from the $367 billion they handled in January.
A similar pattern happened in the spot market, as all DEX networks handled $243 billion, which is a significant decrease from the $564 billion that was handled in January. As Bitcoin and the majority of alternative cryptocurrencies lost impetus and withdrew, this performance occurred.
Both centralized and decentralized exchanges have historically seen a decrease in the volume of transactions they process while cryptocurrency prices are falling. HYPE’s price also decreased as a result of criticism regarding the manner in which it dealt with Jelly, a new meme coin.
After opening two long positions on JELLY with a combined value of around $4.1 million, a trader went on to open an extra short position with a value of $4.1 million against those long positions. The Hyperliquidity Provider Vault suffered a significant loss because of these trades, which occurred when the price of JELLY increased by 400%.
In the end, Hyperliquid removed the token from the market, which resulted in a reaction from the community. Since then, the company has pledged to compensate the affected users.
On Monday, the four-hour chart revealed that HYPE saw a decline and reached its lowest point at $12.11. This level is significant because it aligns with the lowest swing on March 13, forming a double-bottom pattern with a neckline at $17.26, which peaked on March 24. A double bottom is a pattern that frequently indicates a bullish reversal.
The MACD indicator has created a bullish crossover, while the BBTrend indicator has dipped to minus 25.13. Both of these developments are positive. Using the Bollinger Bands indicator, BBTrend calculates the spread that exists between the outer lines of the indicator.
Therefore, it is highly probable that the price of Hyperliquid will recover, and it is possible that it will reach the resistance point at $17.26, which is almost 31% higher than the present level. An additional decline is likely to occur if the price falls below the double-bottom level.
