The Hyperliquid token dropped to a crucial support level as volume on its perpetual decentralized trading platform slumped.
Hyperliquid (HYPE) dropped to a low of $12.10, a notable level since it was its lowest level on March 13. Its market cap has dropped from over $9.7 billion in December to $4.43 billion.
DeFi Llama data shows that the volume of cryptocurrencies traded on its network declined again in March. It handled over $159 billion in volume, down from $187 billion in February and $197 billion in January.
Hyperliquid has now processed a cumulative volume of $1.16 trillion, making it the largest perpetual futures exchange in the industry. Jupiter (JUP), its biggest competitor, has handled $268 billion in cumulative volume.
The total volume of assets traded across all decentralized perpetual futures platforms also declined in March. They processed over $275 billion in assets, down from $367 billion in January.
A similar trend occurred in the spot market, where all DEX networks handled $243 billion, compared to $564 billion in January.
This performance happened as Bitcoin (BTC) and most altcoins lost momentum and retreated. Historically, the volume handled in centralized and decentralized exchanges drop when crypto prices are diving.
HYPE’s price also dropped amid criticism over how it handled Jelly, a new meme coin. A trader opened two long positions on JELLY worth about $4.1 million, then placed an additional $4.1 million short position against those longs.
These trades pushed JELLY’s price up by 400%, resulting in a major loss for the Hyperliquidity Provider Vault. Hyperliquid later delisted the token, triggering backlash from the community. The platform has since pledged to compensate the affected users.
HYPE price technical analysis
The four-hour chart shows that HYPE dropped and bottomed at $12.11 on Monday. This level is significant as it matches the lowest swing on March 13, forming a double-bottom pattern with a neckline at $17.26, its highest point on March 24. A double bottom is a common bullish reversal signal.
The two lines of the MACD have formed a bullish crossover, while the BBTrend indicator dropped to minus 25.13. BBTrend measures the spread between the outer lines of the Bollinger Bands indicator.
Therefore, the Hyperliquid price will likely bounce back, and possibly hit the resistance point at $17.26, which is about 31% above the current level. A drop below the double-bottom level will point to more downside.
