Blockworks Research analyst Shaunda devens argued, in a post on X recently, that Hyperliquid’s retreat from around $52 represents a return towards a realistic valuation following a rally driven by flow which carried the token above its fundamentals.
HYPE is one of the best performers on the market this year. It has climbed against broader downward trends at various points, and yet still holds a near-101% gain year to date. This increased interest in how far this current decline might go.
Devens traced Hyperliquid Strategies is preparing for a concentrated buy-in [PURR]The digital asset treasury accumulates 11.12 million Hype at an average rate of $100 million per month.
This accumulation has left Strategy with a position of close to 10% in HYPE, which is the biggest digital asset treasury of crypto.
The news of AQAv2’s upgrade has added momentum, as the framework returns the majority of reserve-yield revenues from stablecoins to the protocol. HYPE buybacks. Devens said that it was the same as the flow of treasury funds, which were the driving forces behind the increase above $50.
Devens, who saw the rally as relying on momentum traders and the Treasury bid instead of the fundamentals, said that the rally was invalidated.
“Because the move was largely independent of fundamentals, driven by the DAT bid and momentum traders, with a clear invalidation once that buying stopped, it was fairly clear holders and traders would take profits into these temporarily elevated prices.”
HYPE traded largely uncorrelated with the rest of the crypto market, but the core business remains heavily linked to the on-chain activities. Devens reported revenue for July of $43 millions, compared to $92 million a year ago. The shift in price has now begun to show.
The HYPE spot flows are still lacking a clearly defined accumulation signal
CoinGlass Spot data A reading of around $22.34 in net outflows indicates that there has been more HYPE exiting exchanges over the past thirty days.
The gap is narrow and does not reach the level of accumulation that would allow HYPE to continue its upward trajectory.
HYPE will remain in limbo until these exchange outflows are accompanied by sustained purchases.
Final Summary
- The rally was driven by Treasury purchases of 11,12M HYPE. Once that bid ended, the price continued to rise.
- HYPE will focus on its core business as July’s revenue dropped to $43M, down from $92M a few months ago.
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Source: ambcrypto.com
