After a week of strong momentum, the market has entered an inflection point.
From a technical perspective, the crypto market has had a bullish week during the 19th to the 23rd of August, as large-cap cryptos closed multiple sessions with green candles on both daily and weekly charts.
Overall, more than $480 billion was added to the total crypto market cap. However, Bitcoin took more than 62% of all inflows, showing that capital remained heavily concentrated in BTC.
Interestingly, Bitcoin has kicked off the last week of August down nearly 1.5% intraday. The same goes for Hyperliquid, as the chart shows a sharp decline over the past session, closing 3% lower than the previous day. That said, the “FOMO” factor could be enough for Hyperliquid to head higher.
For one, Hyperliquid [HYPE] closed the week at a new ATH, entering a price discovery phase. In terms of sentiment, this development is intrinsically bullish, as a break higher is likely to catalyze fresh FOMO and drive additional buying.
On that note, it may be worth noting the way in which the token’s 3% pullback appears to have weeded out weak longs, while rising Open Interest suggests that new positions are being opened, allowing momentum to remain strong.
Crucially, such a bullish weekly close does not appear to have dried up DeFi’s ability to draw in capital. As a major perpetual trading platform, Hyperliquid’s advantage appears to be in the spotlight.
The key question, at this point, is whether HYPE’s weekly close allows it to retain its edge even as the broader environment begins to cool, with trading activity and open interest remaining at record levels.
Hyperliquid faces its first real test
The open interest of Hyperliquid has increased by an incredible sum of $1 billion in the last week.
It means that traders continue to buy HYPE contracts, believing that the asset will hype once again. The action speaks for itself, as momentum is still on the rise, although increased leverage may lead to high volatility risks.
Nevertheless, this is where the on-chain data speaks for Hyperliquid’s bullish potential.
According to DeFiLlama, Hyperliquid’s total fees for the week reached $24.63 million, its strongest weekly fee generation since early June. Total perp volume also came in at around $70 billion.
This is an astonishing figure that implies that the recent HYPE rally has serious trading volume behind it, not just speculation. And the proof is right here in the image below.
Despite leading the crypto charge and fueling the rally in the broader market, HYPE/BTC still managed to close the week up more than 15%, thereby outperforming Bitcoin on a relative strength basis and fueling the fire for Hyperliquid’s growth.
To put this into perspective, ETH/BTC closed the week up only 6%, which implies that HYPE’s strength was more than 2x of ETH’s strength. This is a strong sign that the altcoin is gathering significant traction and attention from the crypto market.
Looking forward, the question now becomes whether this strength can continue as the market continues its cooldown phase.
Provided that trading volume, Open Interest, fee generation continues to rise, there is a good chance that this recent downtrend is merely a consolidation phase and not a reversal.
Final Summary
- Hyperliquid is still showing strong momentum, backed by rising open interest, fees, and trading volume.
- The key test now is whether HYPE can hold these gains as the broader market cools.
