HYPE price dips 10% as BitMEX co-founder dumps 96,600 tokens with crucial warning

Cryptocurrencies start the week with significant losses as the Fed’s latest cut turns out to be a sell-the-news event.

The global crypto market capitalization declined by 3.77% the past 24 hours to $3.89 trillion.

Meanwhile, Hyperliquid’s HYPE led the downside with an over 10% slide on its daily price chart.

HYPE’s downside intensified after a massive sell from BitMEX co-founder Arthur Hayes.

Lookochain data shows the billionaire offloaded 96,628 HYPE tokens over the weekend, worth approximately $5.1 million.

The transaction saw Hayes pocketing approximately $823,000 in returns.

The substantial dump sparked speculations, especially as it comes after Hayes forecasted a 126x surge for HYPE.

Is the digital token eventually losing steam after gaining more than 1,400% in the past year?

Arthue Hayes’ research firm and family office, Maelstrom, highlights the reason behind the exit.

Why Hayes dumped HYPE

Hayes jokingly revealed that he reduced his holdings to pay the deposit for the new Ferrari.

Later, Maelstrom's research clarified the reasons behind his decision.

The analysis highlights looming token unlocks that could mean prolonged selling pressure for Hyperliquid’s native token.

The project will start vesting a staggering 237.8 million tokens for over two years, from November 29.

That represents roughly $11.9 billion (at current market prices) worth of supply flooding the market, with around $500 million unlocked every month.

Indeed, token unlocks aren’t uncommon in the crypto space.

These events impact market sentiments and price stability as they are fundamental in managing the distribution and circulation of a token’s supply.

However, Hyperliquid’s unlocks raised eyebrows as it will likely fail to absorb looming bearish pressure with its buybacks.

Maelstrom trusts the buyback program can only handle 17% of the surging supply, leaving over $400M of possible sell pressure that traders have to digest.

The analysis added that digital asset treasuries (DATs) cannot offset Hyperliquid’s unlock-fueled sell-off.

While Sonnet has raised over $800 million ($305M in cash and $583M in HYPE coins), it might not be enough to keep prices afloat.

HYPE price outlook

The native token exhibited a bearish outlook. It trades at $48.79 after a swift slide on its daily price chart.

HYPE’s trading volume has increased by 135% in the last 24 hours.

That signals robust user activity, possibly from participants exiting positions to avoid further losses.

Broad market declines, with liquidations topping $1.5B, contribute to HYPE’s downward stance.