TLDR
HYPE token dropped 15-16.57% in 24 hours
Concerns raised about HyperLiquid’s centralization
HyperLiquid controls 81% of staked HYPE tokens
Trading within descending channel at $21.59 support
Previous monthly gains were 64.93%
HyperLiquid, a layer-1 blockchain platform known for its derivatives exchange, is facing increased scrutiny over its centralization practices as its native HYPE token experienced a 16.57% price decline in the past 24 hours.
The concerns emerged after Kam Benbrik, an employee at node operator ChorusOne, published detailed observations about HyperLiquid’s operational structure. Benbrik highlighted that HyperLiquid currently maintains control over 81% of the staked HYPE tokens, raising questions about the platform’s decentralization claims.
— Kam (@KamBenbrik) January 7, 2025
The concentration of staked tokens presents potential risks to the network’s stability. According to Benbrik’s analysis, if a single entity controls one-third of the stake, they can halt the chain. More concerning is that 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 “jails” node operators, limiting their ability to operate independently within the network.
The price impact 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.
Hyperliquid
HYPE Price
Despite the current downturn, 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 stated they plan to make their code open-source 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 crucial role in the ecosystem’s growth, and feedback is taken seriously.
Recently, some misconceptions have emerged regarding validators.…
— Hyperliquid (@HyperliquidX) January 8, 2025
The platform’s response includes plans to enhance decentralization, though specific details and timelines for these improvements have not been disclosed. This lack of concrete information has contributed to market uncertainty.
Technical indicators show mixed signals for HYPE’s near-term price action. The Relative Strength Index (RSI) suggests that selling pressure may be beginning to ease, though overall market sentiment remains bearish.
The 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 decline, possibly anticipating a potential upward move. Technical analysis suggests that a bullish breakout could occur if the price breaks above the upper resistance line of the current descending channel.
Historical data shows that 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 are closely monitoring this level as it could determine the token’s short-term trajectory.
Market data shows trading volumes have increased during the recent price decline, indicating active market participation in response to the centralization concerns.
The most recent trading data shows HYPE maintaining its position at the $21.59 support level, with ongoing debate about HyperLiquid’s centralization issues continuing to influence market sentiment.
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