Key Highlights
- HyperLiquid said that it prohibits staff from HYPE trading, stressing integrity as ex-employee short-selling activity sparks market confusion.
- HYPE has dropped over 58% since October, showing oversold conditions, though minor buying interest hints at potential recovery.
- $90M HYPE moved from staking signals upcoming token unlocks, while strong fundamentals support long-term holder opportunities.
Decentralized perpetual futures exchange HyperLiquid Labs has shared its strict trading rules as HYPE faces heavy market pressure. The exchange shared that employees and contractors are banned from trading HYPE derivatives or using confidential information.
This comes amid worries about an ex-employee short-selling HYPE, which the team said doesn’t involve current staff. HyperLiquid stressed that honesty is mandatory, and breaking the rules can lead to legal action.
According to steven.hl on X, the wallet 0x7ae4, seen shorting HYPE, belongs to an ex-employee terminated in Q1 2024. HyperLiquid confirmed that no current personnel engage in derivative trading or insider activities. “Building a transparent financial future requires a foundational commitment to ethical conduct and legal clarity,” the team stated on Discord.
Team trading policies and ethical standards
As per the exchange’s Discord announcement, the HyperLiquid Trading Policy forbids the trading of derivatives using HYPE. Shorting and going long are specifically prohibited. Also, any kind of trading using material non-public information is not allowed.
Sharing any kind of confidential knowledge with third parties is also prohibited. HyperLiquid explains the importance of these policies in ensuring the ecosystem and market confidence.
Integrity, the group added, “is non-negotiable at Hyperliquid Labs. Any violation of these grounds for immediate termination and potential legal proceedings.” This statement was made in a bid to clarify integrity among the community following the integrity of the former employee being called into question.
Market performance and technical indicators
HYPE has faced challenges recently, falling over 58% from its October high at $60 to its current $24.97. From the one-day chart on TradingView, it appears that the Bollinger Bands have expanded, indicating high levels of market volatility. Current prices are near the lower band, indicating that prices might be oversold.
The Simple Moving Average is declining, hence the dominance of bearish momentum. The Stochastic RSI shows oversold levels below 60. The sudden market capitulation in mid-December triggered a severe price decline. Afterwards, there was a minute stabilizing trend.
The recent green candles indicate a possible onset of purchasing, perhaps in the short term. Notice, too, that Bollinger Bands typically demonstrate price variability with definite bounds on both ends, whereas Stochastic RSI gauges overbought or oversold values, hinting at a possible trend reversal.
Token movements and unlocking events
Approximately two weeks ago, rumors were circulating that HyperLiquid was planning to move $90 million worth of HYPE tokens from staking wallets to spot wallets. This had indicated that they were planning for the unlock of tokens. The team’s address 0x43…a251 transferred 2.6 million HYPE at 12:32 UTC+8 today. Nearly all HYPE remains staked, about $8.28 billion, while $74 million sits in spot balances.
Transfers from the wallet ranged between 15,625 and 74,999 HYPE, worth $538,000 to $2.59 million, mostly sent to external addresses. Small amounts of other tokens were also received, including GPT, PURR, and KNTQ. Despite speculation, HyperLiquid has not sold any HYPE yet. HypingBull commented, “The miracle didn’t happen. Hyperliquid distributed rewards to team members and returned the rest to staking.”
HyperLiquid has also emphasized today strong fundamentals, generating daily revenue and funneling most into the Assistance Fund to buy back and burn HYPE tokens. The team suggests any temporary price dip could offer an attractive entry for long-term holders.
HyperLiquid has set strict rules to keep its team from trading HYPE, aiming to protect investors. Even though the token’s price has dropped a lot, the project remains strong. This means people holding HYPE for the long term could find it a good time to buy or hold.
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