Shaken by a major hack in late March, Hyperliquid's HYPE token is making a strong comeback with record fees of $3.64 million in 24 hours. Analysts foresee an imminent surge as the platform shows unexpected resilience. Explore the volatility and opportunities in this rebound defying expectations.
Amid market uncertainty in the cryptocurrency space, Hyperliquid’s HYPE token is showing a remarkable turnaround following a significant hack at the end of March. The platform raked in a record $3.64 million in fees in a single day on April 7, while its price surged by 30% in the short term.
On March 27, Hyperliquid fell victim to a clever exploit that took advantage of a flaw in its liquidation mechanism. An anonymous trader manipulated the market by combining long positions worth $4 million with a short position of $4.1 million on the memecoin Jelly my Jelly (JELLY).
The 400% surge in JELLY’s price caught the platform off guard, allowing the attacker to escape with a loot of $6.26 million.
This incident, the second notable one in March according to Bobby Ong of CoinGecko, prompted Hyperliquid to halt JELLY trades and remove the token from its ecosystem, citing “dubious market movements.”
The attack had an immediate impact on the HYPE token, plunging its price below $10 in early April, hitting a low of $9.87 – a drop of over 70% from its peak of $35.20. The market cap followed a similar trajectory, plummeting from $10 billion in December to around $3.8 billion today.
Investor sentiment hit a low, with 69% of traders feeling pessimistic and a Fear & Greed index at 26, reflecting widespread distrust. Yet, encouraging signs are emerging. On April 7, Hyperliquid made a striking announcement on Twitter:
This explosive 132.26% increase over the previous period marks a strong comeback for activity on the platform, defying the darkest predictions.
Hyperliquid promptly responded to the crisis by enhancing its security protocols, including imposing a raised margin requirement of 20%. These adjustments are beginning to reassure users, as evidenced by the platform’s continued dominance in the decentralized futures contract sector, with a market share of 78.8%.
Ryan Lee, an analyst at Bitget Research, remarked: “This hack exposed vulnerabilities, but the swift response and security enhancements could turn this incident into a stepping stone. The record fees on April 7 prove that users are regaining confidence.”
For those considering a position on HYPE, here are the critical technical levels to watch:
A surpassing of $14.44 could validate a bullish trend, with a target of $20 by the end of April according to some analysts, representing a surge of over 100% from recent lows. However, volatility remains high, and liquidity challenges along with fragile user confidence call for caution.
Despite this ordeal, Hyperliquid retains significant technological strengths:
These fundamentals explain why the platform continues to attract users, even after such a high-profile setback.
HYPE token’s resilience against this hack illustrates the crypto sector’s ability to bounce back from adversity. While Hyperliquid’s corrective measures seem promising in the short term, their effectiveness in the long run remains to be seen. It is worth noting that the fees generated on Hyperliquid are used to purchase HYPE tokens. These new records could, therefore, drive its price back up.
For opportunistic investors, HYPE could present a buying opportunity at a low point, provided risks are managed. Available on exchanges like Bitget, this token deserves special attention but with a cautious approach in this unpredictable environment.
However, April could signal a rebound for the token. Here is a quick and clear guide to acquiring this token in a few simple steps, whether you are a novice or experienced trader:
Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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