Layer-1 blockchain Hyperliquid, known for its decentralized derivatives exchange, has seen a decline in its Total Value Locked (TVL) since the start of the year. This decline comes despite the overall slight increase in the decentralized finance (DeFi) TVL in the market since January 1.
This drop in TVL has caused a decrease in demand for Hyperliquid’s native token, HYPE. With buying pressure fading, the altcoin is poised for further decline.
Hyperliquid TVL drops 20%
According to DefiLlama, Hyperliquid’s TVL has fallen 20% since the start of the year. At the time of writing, it stands at $1.89 billion, its lowest level since January 1.
hyperliquid TVL. Source: DefiLlama
This decline has occurred despite an overall increase in DeFi TVL in the broader market. According to the on-chain data provider, the crypto market’s DeFi TVL currently stands at $120 billion, registering a 1% increase over the past seven days.
When a protocol’s TVL drops, it usually indicates lower user participation. This is reflected in the steady decline in Hyperliquid’s trading volume. According to DefiLlama, it has plummeted by 19% in the last week.
Hyperliquid Trading Volume. Source: DefiLlama
HYPE reage
A decline in a protocol’s TVL reflects a reduction in the amount of capital invested or staked on the platform, indicating reduced user participation. This often leads to a decrease in the value of its native token, as reduced capital reduces demand for the token.
This is evident with HYPE, which has seen its value drop by 10% in the past seven days. Its Relative Strength Index (RSI), measured on a four-hour chart, supports this trend, currently at 35.72. The RSI, an indicator of overbought or oversold market conditions, shows significant selling pressure at this level.
RSI from HYPE. Source: TradingView
Additionally, the HYPE token price continues to trade below the red line of its Super Trend indicator, which tracks the direction and strength of its trend. The indicator is displayed as a line on the price chart and changes color to indicate the trend: green for an uptrend and red for a downtrend.
If the price of an asset is below the Super Trend line, it signals bearish momentum in the market and suggests a possible price decline.
Super Trend do HYPE. Fonte: TradingView
HYPE Price Prediction: What to Expect?
HYPE is currently trading at $22.18. If the selling pressure continues, the token’s price could fall below $20 and reach $17.34.
HYPE Price Analysis. Source: TradingView
On the other hand, a positive shift in market sentiment could propel the HYPE token price to $31.04.
The article Hyperliquid TVL hits yearly low, HYPE drops to $20 appeared first on BeInCrypto.