Recent price weakness in HYPE has unfolded alongside commentary that frames the move as structural rather than fundamental. The accompanying charts show a sustained downtrend from prior highs, with price pressing into the low-$20 area as selling pressure persists. This decline has taken place even as the broader thesis around the project remains intact, highlighting a disconnect between price behavior and underlying fundamentals.
A Market Favorite Turns Into a Liquidity Source
According to analysis shared by Altcoin Sherpa, HYPE built its reputation as a reliable asset throughout 2025 due to strong fundamentals, an active community, and consistent cash flows.
$HYPE was always such a great one because it is rooted in fundamentals, great community, has excellent PMF/cashflows, and a cracked team. This became the auto buy whenever there were strong dips in the market throughout 2025 and easy for most traders because they didn't have to… pic.twitter.com/LRxFHZAX3v
— Altcoin Sherpa (@AltcoinSherpa) January 20, 2026
These characteristics made it a frequent choice during market pullbacks, as traders viewed it as offering comparatively strong downside protection. That positioning also meant HYPE became widely held, reducing the need for active decision-making during dips and reinforcing its role as a default allocation rather than a speculative trade.
Selling Pressure Linked to Unlocks and Large Holders
The recent decline is attributed not to deteriorating fundamentals, but to supply-side pressure. Team token unlocks and sizable sellers are currently active, introducing persistent overhead supply.
The longer-term chart reflects this dynamic, showing a clear transition from a broad topping structure into a prolonged downward move. Price continues to grind lower as this supply is absorbed, suggesting that the market is still in the process of rebalancing rather than reacting to new negative information.
Short-Term Weakness Within a Longer-Term Framework
On the lower-timeframe chart, HYPE is trading near $22 after a sharp drop, with elevated volume accompanying the move lower. This indicates active participation on the sell side rather than thin liquidity.
Altcoin Sherpa notes that this environment could allow the drawdown to extend while these sellers remain present, especially given a generally weak backdrop for Bitcoin, which tends to weigh on altcoin sentiment more broadly.
Fundamentals Intact as Price Adjusts
Despite the ongoing retracement, the core assessment remains that HYPE’s underlying fundamentals have not changed. The current price action reflects a phase of distribution and supply clearance rather than a breakdown in the project’s long-term outlook.
The charts suggest that the market is working through excess inventory, with price adjusting lower to facilitate that process before a more stable structure can emerge.