Is Hyperliquid in Trouble? JELLY Token Controversy Sparks FTX 2.0 Fears
Hyperliquid has dropped by 1% today, with its fall to $14.43 coming after Bitget CEO Gracy Chen criticized the platform for its delisting of JELLY perpetual futures contracts.
With the crypto market down by 2% in the past 24 hours, HYPE also finds itself down by 3.5% in the past week and by 20% in the past month.
The altcoin has also suffered a 55% decline since reaching an ATH of $34.96 on December 22, and with Chen suggesting that the DEX platform could become “FTX 2.0,” it may be some time before its HYPE token fully recovers.
Yet Hyperliquid’s underlying fundamentals remain largely the same, with its coin likely to return to sustained growth once wider market conditions allow.
Is Hyperliquid in Trouble? JELLY Token Controversy Sparks FTX 2.0 Fears
Announcing its actions via X on March 26, Hyperliquid explained that its validators agreed to delist JELLY perpetuals, after detecting “evidence of suspicious market activity.”
As its tweet makes clear, the platform is promising to compensate all affected users, although this promise hasn’t been successful in placating everyone.
Some have complained about the apparent lack of compensation for users who withdrew from the Hyperliquidity vault just before the exploit, while others have taken issue with the arguably centralized way in which Hyperliquid delisted JELLY perpetuals.
This is the line of attack of Bitget’s Gracy Chen, who in a tweet chided Hyperliquid for being “immature, unethical, and unprofessional.”
Chen also likened Hyperliquid to an “offshore CEX with no KYC/AML, enabling illicit flows and bad actors.”
It may be arguable that Chen, as the CEO of a centralized exchange, has an axe to grind, but it was clear from HYPE’s sudden drop yesterday that the wider market has also lost some trust in Hyperliquid.
As its chart shows, it fell from around $16.26 to $13.51 in a matter of hours, with a big spike in trading volume as holders rushed to sell.
It has since stabilized, with its RSI (purple) bouncing back from 30 yesterday around 40 as of writing, although its 30-period average (orange) continues to fall further below the 200-period (blue).
We can probably expect HYPE to continue struggling in the near term, particularly when market conditions continue to wobble in the face of the US’ deepening tariff war with the rest of the world.
Yet it still remains a busy DEX, with its current TVL making it the 20th-biggest layer-one in the crypto ecosystem.
As such, it could recover strongly in the coming months, potentially returning to $20 towards the end of Q2.
Alternative Alts for Market-Beating Gains
HYPE may need several weeks or even months to recover, in which case some traders may want to diversify into newer tokens, particularly during the current bearish period.
While picking newer coins can always be difficult, there are always some tokens that have the potential to outperform the market, particularly during their initial growth periods.
One coin like this is Bitcoin Bull (BTCBULL), an ERC-20 token that has now raised more than $4.1 million in its presale.
Bitcoin Bull is interesting because of its deflationary tokenomics, which work in tandem with the price movements of Bitcoin (BTC) itself.
BTCBULL has hard cap of 21 billion, with its protocol burning a percentage of this every time Bitcoin (BTC) reaches a new price milestone, starting with $125,000 and progressing with each additional $25,000.
Excitingly Bitcoin Bull will also hold BTC airdrops whenever Bitcoin reaches a new $50,000 milestone, starting $100,000.
By combining token burns with Bitcoin airdrops, BTCBULL is likely to generate lots of interest and demand, as already signalled by its popular presale.
And what makes it even more profitable is that, as an ERC-20 coin, holders will be able to stake it for a passive income.
Investors can still join its sale by heading over to the Bitcoin Bull website, where 1 BTCBULL costs $0.00243.
This price will rise tomorrow and continue to rise every few days until the sale ends, so new buyers should act quickly.