TLDR
- The HYPE token fell 15-16.57% in 24 hours
- Concerns over HyperLiquid’s centralization
- HyperLiquid controls 81% of staked HYPE tokens
- Trade within descending channel at $21.59 support
- Previous monthly gains were 64.93%
HyperLiquid, a layer-1 blockchain platform known for its derivatives exchange, faces increased scrutiny of its centralization methods as its original HYPE token experienced a price decline of 16.57% in the last 24 hours.
The concern arose after Kam Benbrik, an employee of node operator ChorusOne, published detailed observations about HyperLiquid’s operational structure. Benbrik emphasized that HyperLiquid currently controls 81% of the staked HYPE tokens, raising questions about the platform’s decentralization claims.
— Kam 🌑 (@KamBenbrick) January 7, 2025
The concentration of exposed tokens poses potential risks to the stability of the network. According to Benbrik’s analysis, if a single entity controls a third of the stake, they can stop the chain. More worryingly, control over two-thirds of the stake would result in complete network control.
Another point of contention is HyperLiquid’s use of closed source code. Benbrik argues that this practice effectively “imprisons” node operators, limiting their ability to operate independently within the network.
Price action has been notable, with HYPE trading at a support level of $21.59. This price point has previously served as a bullish catalyst on three separate occasions, according to technical analysis data.
HYPE Price
Despite the current decline, HYPE’s monthly performance remains positive, with gains of 64.93% recorded before the recent decline. The token has been trading within a descending channel pattern, characterized by consecutive lower highs and lower lows.
HyperLiquid has responded to these concerns through their official X (formerly Twitter) account. The team acknowledged the centralization issues and said they plan to open source their code once security measures are properly implemented.
Hyperliquid is constantly iterating and improving, all in service of its mission to bring all finance onchain. The community has played a critical role in the growth of the ecosystem and feedback is taken seriously.
Recently, some misconceptions have surfaced regarding validators.…
— Hyperliquid (@HyperliquidX) January 8, 2025
The platform’s response includes plans to improve decentralization, although specific details and timelines for these improvements have not been disclosed. This lack of concrete information has contributed to market uncertainty.
Technical indicators are showing mixed signals for HYPE’s short-term price action. The Relative Strength Index (RSI) suggests that selling pressure may be starting to ease, although market sentiment remains bearish.
Total Value Locked (TVL) metrics for HyperLiquid also indicate bearish momentum, adding to the current market pressure on the HYPE token.
Trading patterns show that investors continue to accumulate HYPE tokens despite the price drop, possibly anticipating a potential upside move. Technical analysis suggests that a bullish breakout may occur if the price breaks above the upper resistance line of the current descending channel.
Historical data shows the token’s previous peak reached $35.7, setting a benchmark for potential recovery targets should market conditions improve.
The current support zone at $21.59 represents a critical level for HYPE’s price action. Market observers closely monitor this level as it can determine the token’s short-term trajectory.
Market data shows that trading volumes have increased during the recent price decline, indicating active market participation in response to centralization concerns.
Recent trading data shows HYPE maintaining its position at the $21.59 support level, with ongoing debate over HyperLiquid’s centralization issues continuing to weigh on market sentiment.
