Hyperliquid Tumbles 10% Overnight: Is HYPE Headed for More Pain?

Hyperliquid’s native token HYPE faced intense selling pressure in mid-December 2025, tumbling 9-10%+ in recent 24-hour sessions amid cascading liquidations and broader crypto caution. Trading around $24.40 as of December 19, the token has shed over 60% from its September all-time high near $59, underscoring fragile sentiment in the decentralized perpetuals sector.

The sharp drops—evident on December 16-18—stemmed from heavy deleveraging, with over $115 million in long positions wiped out on Hyperliquid alone during a $584 million market-wide liquidation event. Profit-taking post-rally, token unlocks, and low holiday volumes amplified volatility, pushing HYPE below key supports like $28-30 and toward seven-month lows.

Technical charts remain bearish: failure to reclaim $26-30 could target $20 or lower, with RSI nearing oversold but momentum negative. On-chain metrics show cooling activity, reduced open interest (down 20%+ weekly), and declining platform dominance amid rising competition from rivals like Aster and Lighter.

Fundamentals offer counterpoints. Hyperliquid’s on-chain DEX continues leading perps volume (~$419B monthly peak), with fee-driven buybacks absorbing supply. A December 17 governance proposal to burn ~37 million HYPE tokens from the Assistance Fund—potentially removing 10-13% of supply—aims to counter dilution and restore confidence, pending validator vote.

Whales have accumulated dips, depositing millions in USDC for buys below $25. Long-term bulls view corrections as resets for the high-performance L1 protocol’s derivatives infrastructure.

Near-term, HYPE’s path hinges on macro recovery, burn outcome, and defense of $22-24 supports. Volatility persists into year-end, advising caution amid elevated risk.