Following a powerful weekly surge, Hyperliquid’s HYPE token has encountered a brief period of consolidation, slipping 1.88% in the last 24 hours to trade at $31.23. This minor correction comes against the backdrop of a broader market retreat, with the total cryptocurrency market capitalization declining by 1.83% amid an atmosphere of “Extreme Fear,” as indicated by a Fear & Greed Index reading of 15. The dip is not merely a reflection of general market weakness but is driven by two significant, platform-specific events that have dampened short-term sentiment.
The first catalyst was a dramatic deleveraging event on January 31, 2026, when the prominent “1011 Insider Whale” on Hyperliquid suffered a staggering $128.87 million loss from a forced liquidation. This incident, part of a larger $2.56 billion market-wide liquidation cascade, served as a stark reminder of the extreme risks associated with high-leverage trading on the decentralized exchange. The sheer scale of the loss eroded trader confidence and triggered immediate sell pressure, casting a shadow over the platform’s recent momentum.
Compounding this bearish pressure is the looming token unlock scheduled for February 6, 2026. On that date, 9.92 million HYPE tokens—representing 2.79% of the circulating supply and valued at approximately $305 million—will enter the market. While Hyperliquid has notably reduced its team unlocks by 90% for February, the market is still pricing in the potential for dilution and preemptive selling from unlock recipients, which has overshadowed the token’s impressive 39.96% weekly rally. In the current environment of thin liquidity and risk aversion, altcoins like HYPE are particularly vulnerable to such supply shocks, often exhibiting amplified price movements compared to the broader market. The key question now is whether the market can absorb this new supply without triggering a sustained decline, and if HYPE can hold its critical support level near its 7-day simple moving average at $30.47.
