Hyperliquid (HYPE) Price Outlook: Why the Next Big Move Could Be Downward

Hyperliquid (HYPE) price is trading around $47, and the question that could be on he mind of every investor is about where it is going from here. According to Gerhard from Bitcoin Strategy, Hyperliquid’s growing popularity is both a major opportunity and a potential ticking time bomb. His latest analysis takes a close look at the Hyperliquid token and the market forces shaping where it might go next.

Gerhard describes Hyperliquid as the leading decentralized perpetual futures exchange, a platform that lets traders bet on crypto prices using leverage. That leverage is what makes things exciting, but it’s also what turns opportunity into risk.

Trading volumes across decentralized perpetual futures exchanges have been growing much faster than crypto prices. It’s a sign that more traders are using leverage to bet on both rising and falling prices. The problem, as Gerhard points out, is that this creates a more fragile market.

Right now, there are 2.5 times more long traders than short traders on Hyperliquid. When too many traders bet on rising prices, a small dip can trigger a wave of liquidations. That’s what happened during the flash crash a few weeks ago when altcoin market caps dropped by almost half within hours.

According to Gerhard, the entire event showed how interconnected perpetual futures and spot markets have become. Once liquidation starts, arbitrage bots sell in the spot market too, creating a domino effect.

How the HYPE Token Fits Into the Picture

The HYPE token sits at the core of Hyperliquid’s ecosystem. Traders use it to lower trading fees through staking. The more HYPE a trader stakes, the higher their fee discount. This creates constant demand for the token as long as trading activity remains strong.

However, Gerhard warns that the token has a “ceiling.” It rarely outperforms the broader altcoin market for long. Despite a 27% climb last week, the data suggests the momentum could slow down. Total value locked (TVL) on the platform has stabilized under $5 billion, and open interest has dropped sharply from $15 billion to $6 billion after the crash.

That decline means fewer active positions, a clear sign that risk appetite among traders is cooling.

Upcoming Token Unlocks Could Add Pressure

Gerhard draws attention to one major concern: token unlocks. Starting in November, the Hyperliquid team will begin receiving $427 million worth of HYPE tokens every month. Within a year, they will control more than 20% of total supply.

For a project with a $16 billion market cap and a $48 billion fully diluted valuation, that’s a huge amount of potential selling pressure. As Gerhard notes, the team might not dump everything at once, but even gradual selling can weigh heavily on price.

The valuation comparison also raises eyebrows. Hyperliquid’s fully diluted valuation is around seven times higher than Uniswap’s, even though Uniswap remains the dominant spot exchange. Gerhard believes that kind of gap might be difficult to justify over time.

Why HYPE’s Valuation Might Be Hard to Sustain

While Hyperliquid continues to grow as a platform, Gerhard separates that success from the HYPE token’s price potential. He argues that strong product adoption does not always equal token performance, especially when supply keeps increasing.

He references a common pattern seen across altcoins, steady market cap growth even as prices fall. The reason is simple: more tokens enter circulation each week, diluting value. Across the altcoin market, roughly $1 billion worth of tokens unlock weekly. If new buyers don’t match that pace, prices tend to slide.

Gerhard points to examples like WorldCoin, whose market cap rose even as its price dropped from $10 to below $1. That same dynamic could affect HYPE once unlocks start to flow.

Read Also: Bittensor (TAO) Price Quietly Flips Its Bearish Trend – Here’s What Comes Next

Could the HYPE Price Still 2X?

Gerhard doesn’t rule out short-term gains. Momentum remains positive, and open interest on HYPE is recovering faster than many other assets. Traders who manage their risk properly can still benefit from short bursts of volatility.

However, he emphasizes that upside potential may be limited compared to downside risk. The combination of high valuation, large upcoming unlocks, and heavy leverage makes the market fragile.

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