Michael Nadeau, founder of The DeFi Report, remains optimistic about Hyperliquid’s long-term prospects but believes the recent surge in its HYPE token is poorly timed. In a post on X, he suggested the market is getting overly excited about the bullish story just as on-chain activity and positioning data start to weaken.
Nadeau’s main argument isn’t that Hyperliquid is failing, but that HYPE’s recent price strength may have outpaced what the current underlying data can justify. “I’m a fan of both @Globalflows and HYPE, but think he’s early here,” Nadeau wrote. He noted that HYPE had “been strong in the bear market (outperforming BTC) because of its token economics + the ‘TradFi/Oil futures’ narrative,” but contended that “the reality is that Hyperliquid looks like a ‘risk-off’ chain, just like the rest of crypto.”
Bullish on Hyperliquid Long Term, But Not Now
This distinction is important. Hyperliquid markets itself as a high-performance layer-1 blockchain built for a fully on-chain financial system, featuring on-chain order books for perpetual and spot markets. Supporters often highlight HYPE’s design: trading fees are directed to the community, an assistance fund converts fees into HYPE and burns those tokens, and stakers can receive trading-fee discounts. So when Nadeau mentions “token economics,” he’s pointing to these structural features that have kept HYPE appealing even in tough markets.
He also briefly touched on the “TradFi/Oil futures” narrative, which has gained traction around Hyperliquid recently. The platform’s proposition is that it can bring crypto’s 24/7 market structure to more traditional assets. Oil-linked perpetuals on Hyperliquid saw a spike in attention during recent geopolitical tensions involving Iran, as traders used it to trade crude outside normal market hours. This fueled the idea that Hyperliquid was evolving into a real-time macro trading venue, not just another crypto chain.
Nadeau counters that the data no longer fully supports this narrative. “Fees are down 56%. Volumes are down 55%. Open interest is down 44%. Bridged assets are down 32%,” he wrote, adding there have been “very few inflows over the last 30 days.” These metrics are crucial: fees and volume reflect actual trading activity, open interest shows outstanding derivatives exposure, and bridged assets indicate capital moving onto the network.
He drove the point home by stating, “The reality is it’s the same 50k users on HYPE that we saw last year.” This bluntly frames the concern: the price may be rising on narrative hype while user growth and capital inflows have stagnated.
Nadeau then shifted from fundamentals to market structure. He pointed out that oil futures volume on Hyperliquid peaked on March 9 and has declined since, undermining one of the key drivers behind the rally. Simultaneously, he argued HYPE is “locally overbought,” citing a Relative Strength Index (RSI) of 67, and noted the token is facing resistance at its 50-week moving average—a long-term technical level many traders watch closely.
His skepticism extends to PURR as well. PURR, now trading on Nasdaq as Hyperliquid Strategies Inc., is a digital-asset treasury company focused on accumulating HYPE and providing U.S. and institutional investors with exposure to the token. Nadeau called buying this vehicle in a “risk-off bear market” a “head-scratcher,” especially since, in his view, there’s still little evidence that traditional finance is urgently seeking HYPE exposure. He noted that while HYPE is up 93% since January 20, PURR has gained only 87% over the same period.
Ultimately, Nadeau’s stance is a measured warning, not a bearish surrender. He remains “bullish long term,” but believes that for now, the rally is not supported by the current data.He is betting against the recent price movement. For traders, the message is clear: the long-term outlook for Hyperliquid may still be strong, but in his view, the short-term conditions no longer present a particularly attractive buying opportunity. At the time of writing, HYPE was trading at $41.031.
Frequently Asked Questions
Frequently Asked Questions Analyst Advises Against Buying Hyperliquid
BeginnerLevel Questions
Q1 What is Hyperliquid
A Hyperliquid is a cryptocurrency or digital asset The name suggests it might be related to decentralized finance or liquidity protocols
Q2 What does it mean that an analyst advises against buying it
A It means a financial or market expert who has studied Hyperliquid believes its current price is too high or risky They are recommending that investors do not purchase it right now as they expect the price could fall
Q3 Why would an analyst give this kind of advice
A Analysts look at factors like the assets price history market trends project fundamentals and overall economic conditions If they see signs of overvaluation weak prospects or high risk they issue a caution or sellavoid recommendation to protect investors from potential losses
Q4 Should I immediately sell if I already own Hyperliquid
A Not necessarily An analysts advice is one opinion You should consider your own investment goals risk tolerance and research The advice is specifically about buying at current levels which may differ from the price you bought at Its a signal to be cautious not a direct order to sell
Q5 What are current levels
A Current levels refers to the present market price of Hyperliquid at the time the analysis was written The analyst believes this specific price point is not a good entry point for new buyers
Advanced Practical Questions
Q6 What specific reasons might the analyst have cited
A While the exact reasons would be in the full article common reasons include the price has risen too fast poor tokenomics weak fundamentals of the underlying project increased competition or negative broader market trends
Q7 Is this a shortterm or longterm warning
A This typically implies a shorttomedium term warning about the entry price The analyst likely sees a high chance of a price correction from these levels Their longterm view on the project might be different but they are advising against buying now