Hyperliquid Retreats to $50 as Analyst Calls HYPE's Current Valuation 'More Realistic'

Blockworks Research analyst Shaunda Devens argued in a recent X post that Hyperliquid's retreat to around $52 marks a return to a more realistic valuation, after a flow-driven rally pushed the token well beyond what the decentralized perpetual exchange's underlying business performance justified.

$HYPE has been one of the market's stronger performers this year, climbing against the broader downturn on multiple occasions and still holding a year-to-date gain of approximately 101%. That resilience has drawn attention to how far the current pullback might extend.

Devens traced the run-up to concentrated buying by Hyperliquid Strategies [PURR], a digital-asset treasury that accumulated 11.12 million $HYPE at a pace frequently exceeding $100 million per week. The accumulation left the treasury holding close to 10% of $HYPE's circulating supply — the largest share held by any digital-asset treasury in crypto, surpassing Strategy's 4.5% Bitcoin position, which was built over several years.

News of the AQAv2 upgrade further fueled the momentum, as the framework routes the majority of stablecoin reserve-yield revenue back to the protocol to fund $HYPE buybacks. Devens identified this mechanism alongside the treasury flows as the twin drivers behind the move above $50.

Because the rally relied on the treasury bid and momentum traders rather than fundamentals, Devens identified a clear invalidation point:

"Because the move was largely independent of fundamentals, driven by the DAT bid and momentum traders, with a clear invalidation once that buying stopped, it was fairly clear holders and traders would take profits into these temporarily elevated prices."

Core Business Tied to On-Chain Activity

Although $HYPE has recently traded largely uncorrelated with the rest of the crypto market, the core business remains heavily tied to on-chain trading volumes. Devens highlighted July revenue of $43 million, compared with $92 million in the same month a year earlier — a decline of more than 50% that underscores the widening gap between the token's price strength and its fee-generating activity. The pullback is now beginning to close that gap.

$HYPE Spot Flows Lack a Clear Accumulation Signal

CoinGlass Spot data indicates that more $HYPE has left exchanges than entered them over the past 30 days, with approximately $22.34 million in net outflows — a reading typically associated with accumulation as coins move off trading venues. However, the gap remains narrow and falls short of the decisive accumulation that would be needed to push $HYPE higher from current levels. Whether the AQAv2 buyback mechanism can sustain token demand independently of renewed treasury buying is a key factor to watch going forward. Until those exchange outflows widen into sustained buying, $HYPE's near-term direction stays unresolved.

Summary

Treasury buying of 11.12 million $HYPE drove the rally, and the price rolled over once that bid ceased. $HYPE's next move hinges on the protocol's core business performance, with July revenue having declined to $43 million from $92 million a year prior.