Despite the earlier decline of 25%: HYPE digital currency reaches new high?

The digital currency Hyperliquid (HYPE) has experienced significant volatility recently, losing approximately 25% of its value due to concerns about increased supply and the opening of new currencies. Surprisingly, however, the price continued to rise and hit a new all-time peak, with the currency breaking through the $63 level.

Although this move may seem contradictory on the surface, traders view the project from a completely different perspective.

The main concern is the fully diluted valuation (FDV), because a large part of the products issued by HYPE have not yet been traded and will be gradually released to the market in the future.

The project has a fully diluted market capitalization of over $60 billion, according to CoinGecko, although only a limited percentage of the tokens are currently available for trading.

This pattern often leads to strong selling pressure over time, especially when a digital currency opens up operations to early investors and shareholders, leading many investors to anticipate a bearish scenario similar to what has happened to other digital currency projects before.

Concerns have also grown as some 10 million currencies linked to shareholder distributions are set to open, raising expectations of a massive sell-off.

But “Hyperliquid” contradicts these expectations as it starts to resemble more of a trading company that generates real cash flow, rather than just a traditional speculative project.

The platform continues to record huge perpetual contract trading volume, high value locked within the protocol (TVL), and strong revenue and transaction fees compared to most other DeFi protocols.

Recent reports indicate that Hyperliquid’s revenue levels have prompted some analysts to compare it to major derivatives trading platforms such as CME, rather than treating it as a regular platform.

Meanwhile, short positions accelerated gains after funding rates turned negative and bearish bets mounted against the currency.

As the “hype” broke through the $50 level, many short sellers were forced to close their positions, triggering a strong “short squeeze” wave that pushed the price to new record levels, while open interest also increased significantly.

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