Why Are These Two Altcoins Pumping Against the Crypto Dump?

The cryptocurrency market is currently experiencing a downturn, with weak sentiment and most charts indicating a downward trend. Typically, when Bitcoin drops, most altcoins follow suit without question. However, something has changed. Two altcoins, Aster and Hyperliquid, are breaking from this trend and showing real strength while Bitcoin slides. Such moves are rare and hint at deeper forces at work, such as new demand, fresh inflows, or shifts in user behavior.

This article will examine what makes these two altcoins stand out. It will break down the data, flows, and structure behind their strength, explaining why they are not just surviving the downturn but outperforming the largest asset in the space.

What Is Happening With These Two Altcoins?

Let's start with the numbers for these two altcoins and compare them to Bitcoin's performance over the last 4 to 6 weeks.

Over the past six weeks, Bitcoin ($BTC) has seen a significant decline of around 33%, falling from $125,000 to $84,000. The 30-day and 14-day numbers show decreases of 22% and 17.5%, respectively. Currently, $BTC is trading neutrally, moving sideways.

Now, let's look at $ASTER. Over the last six weeks, it has fallen from $2.06 to $1.19, indicating it slid along with Bitcoin. However, the trend changes when examining the 30-day and 14-day periods, which show increases of 11.6% and 13.8%, respectively. On the day of analysis, $ASTER is down 8.3%.

For Hyperliquid ($HYPE), a similar pattern emerges, though not as pronounced as with Aster. Six weeks ago, it was trading around $47, and it is now at $34. However, the 30-day and 14-day numbers present a different picture. $HYPE is down 1.8% over 30 days and 13.5% over 14 days. On the current day, it is down 12.5%, indicating a broad market bleed.

Despite the daily downturn, $HYPE has been outperforming Bitcoin over the last 30 days, with $ASTER showing an even stronger case. Both tokens appear to be moving against the market trend, with $ASTER demonstrating significant gains and $HYPE maintaining its position. They are outperforming both Bitcoin and the broader altcoin market.

This divergence warrants a closer look at the underlying reasons.

Why Are These Two Altcoins Breaking the Downwards Trend?

Both Aster and Hyperliquid offer derivatives, specifically perpetual futures (perps), which allow traders to use leverage. Aster offers up to 1001x leverage in specific cases, while Hyperliquid provides up to 40x leverage. It is crucial to exercise extreme caution when using leverage, as the potential for high profits is matched by the risk of significant losses.

During a market downturn, perpetual futures DEXes can be a lucrative avenue for traders. Their ability to trade in both long and short directions offers flexibility, enabling strategies like hedging and shorting.

Hedging

Goal: To reduce risk and protect against potential losses on an existing position.

Strategy: Take an offsetting position in a related asset. For example, if you hold $BTC, you could short a $BTC futures contract on a DEX.

Outcome: If the market falls, your long $BTC position loses value, but your short futures contract gains value, offsetting the losses. If the market rises, the gain on your $BTC position is partially offset by a loss on the short contract. However, the hedge still allows you to participate in the upside after covering the hedge cost.

This can be compared to purchasing insurance for your portfolio, a defensive move to mitigate damage from adverse market movements. Once the market stabilizes or the perceived risk diminishes, the hedge or short position can be closed, allowing for full participation in any subsequent upside. This strategy temporarily sacrifices some potential upside to protect against uncertainty.

Think of holding $BTC as owning a house. Your short futures hedge is like buying temporary insurance. If the market drops, the insurance pays out. If the market rises, the cost of insurance slightly reduces your profit, but you still benefit fully once the risk passes.

Shorting

Shorting, or "going short," involves betting that the price of Bitcoin will decrease. In futures markets, it is possible to profit from price declines even without owning the asset. This is achieved by taking the opposite side of a long position, effectively gaining inverse exposure.

If the market drops, you profit instead of losing money. This is why shorting is crucial for hedging and balancing long positions.

Following the cascading liquidations on October 10th, one might expect a reduced appetite for leverage. However, these platforms demonstrate how leverage can also be advantageous, making perp trading appealing to traders, especially during market downturns. It is said that the most significant profits are often made during downward market movements.

It is imperative to only use leverage if you fully understand its implications, as many traders still face liquidations. Nonetheless, the potential for profit during market declines contributes to the outperformance of platforms like Aster and Hyperliquid.

This provides a clearer understanding of why Aster and Hyperliquid, along with their respective altcoins, are outperforming Bitcoin.

What Else Is Cooking for Aster and Hyperliquid?

The primary reason for Aster and Hyperliquid's outperformance is their offering of perpetual futures DEXes. While other chains host perp DEXes, Aster and Hyperliquid stand out as top-tier platforms with additional features that set them apart.

Hyperliquid has a robust buyback program, recently repurchasing $1.3 billion worth of $HYPE. The platform also launched its BLP (Borrow Lending Pool) testnet, signaling a significant infrastructure upgrade and the potential for new features. Speculation about a second airdrop season is also rife, following the immense success of the first airdrop, which provided life-changing sums to early users.

Similar to Hyperliquid, Aster has introduced a new airdrop program, currently in its fourth stage. It is also hosting a $10 million trading competition called the "Double Harvest," which began on November 17th and will run for five weeks. This initiative is expected to boost ecosystem activity. Aster offers leveraged perps, spot and order-book trading, and is developing its own Layer 1 blockchain. The platform also has a buyback program, having repurchased $214 million worth of $ASTER to date.

Both platforms are actively working to differentiate themselves, providing various reasons why these two perpetual DEXes are outperforming $BTC. $ASTER and $HYPE represent strong altcoin opportunities for portfolios at this time.

Are you using either of these platforms or other perp platforms? Share your thoughts in the comments.