Hyperliquid confirmed that a wallet accused of aggressively shorting its native token $HYPE is linked to a former employee dismissed in 2024, addressing insider trading concerns as the token continues to struggle amid broader market weakness.
Key Takeaways:
- Hyperliquid acknowledged that a wallet allegedly shorting $HYPE belongs to a former employee terminated earlier in 2024, distancing the project from the activity.
- $HYPE has remained under pressure, trading near recent lows as of the latest session, with technical indicators reflecting weak momentum.
- Ongoing token unlocks and heightened derivatives activity continue to weigh on sentiment despite transparency efforts by the team.
Hyperliquid moved to quell growing community speculation after on-chain analysts and traders identified a wallet believed to be holding sizable short positions against $HYPE. The address drew attention following sustained selling and short exposure shortly after the token’s launch, prompting accusations of insider trading across social media and crypto-focused forums.
In a public clarification, Hyperliquid stated that the wallet is linked to a former employee who was terminated in early 2024, emphasizing that the individual has had no affiliation with the project for nearly a year. The team stressed that the activity does not reflect Hyperliquid’s internal standards and reiterated its policy prohibiting employees from trading protocol-related assets, including derivatives tied to the platform.
$HYPE Holds Near Support as Traders Digest Insider Link Disclosure
Following the clarification, $HYPE price action has shown recovery, but caution remains to the traders and investors. At the time of writing (9:45AM UTC), HYPE was trading around $25.24, reflecting 4.4% gain in the last 24 hours. However, the token remains down 14% in the last 7 days, around, a significant drop from its recent highs while suggesting that traders are cautious amid lingering bearish sentiment and broader crypto market volatility.
The current price behavior indicates that the market is absorbing the news linking a shorting address to a former employee, but broader forces like technical weakness and ongoing supply pressures remain key influences. The token still shows a significant gap between its all-time highs during early 2025, making the traders look ahead of HYPE’s price action near the key support levels, but still leans to clearer signals and triggers before deciding for a strong bias.
Token Unlocks and Whale Activity Keep $HYPE Under Pressure
The ongoing token unlocks makes the circulating supply increase over time, which further adds to downward pressure on HYPE. Large holders like whales and derivatives traders were also one of the reasons for the token’s volatility, where margin liquidations make the shorter price swings more intensified. These factors, combined with broader altcoin weakness, have limited the token’s ability to recover despite minor daily gains.
Analysts note that while such dynamics are common for post-launch DeFi tokens, they remain critical in shaping short-term sentiment. The combination of supply pressure and active trading by large wallets continues to dominate $HYPE’s price trajectory, keeping traders cautious and attentive to key support levels.
Outlook
Looking ahead, $HYPE’s trajectory is likely to depend on how effectively Hyperliquid manages supply-side pressures and maintains credibility within the competitive DeFi derivatives sector. Community discussions around governance proposals, including potential supply-reduction mechanisms, may become increasingly important as traders reassess long-term value.
In the near term, analysts expect price action to remain sensitive to unlock schedules, leverage positioning, and overall market sentiment. For investors, monitoring on-chain data, governance updates, and technical levels will be critical as Hyperliquid works to stabilize confidence following the disclosure.
Summary
Hyperliquid confirmed a wallet accused of shorting $HYPE belongs to a former employee fired in early 2024, but the token still faces pressure from unlock schedules, derivatives activity, and weak market momentum.
