Hyperliquid Price Drops 10% After JELLY Market Manipulation Incident

The HYPE price saw a major dip in the last day amid a JELLY controversy, which led Hyperliquid to face major scrutiny.

The Hyperliquid price dropped 10% in the last 24 hours to trade at $14.46 as of 4:40 a.m. EST on Thursday morning. The price of the token, which is the native cryptocurrency of the decentralized finance ( DeFi ) platform Hyperliquid, decreased as the token’s trading volume soared 404% to reach $466.13 million in 24 hours.

The HYPE price saw a major dip in the last day amid a JELLY controversy, which led Hyperliquid to face major scrutiny. Specifically, the JELLY token has been involved in a market manipulation incident, which was bad enough. On top of that, the platform’s response to the crisis also raised concerns.

The controversy started when a trader executed a manipulation scheme, shorting JELLY and pumping its price, resulting in a $12 million loss suffered by the platform’s Hyperliquidity Provider (HLP) vault.

Following the incident, Hyperliquid’s price went down from $15.0968 to $13 before seeing a recovery to $15, before dropping slightly to its current price. The token managed to stabilize over the past few hours, which is also mirrored by its technical indicators, such as the Bollinger Bands.

The bands have seen a major tightening after being much wider over the last few days, especially at the moment of the price drop. However, narrow bands are typically a bearish signal, which suggests that the sentiment surrounding the project is still fairly negative.

HYPE/USDT chart analysis (Source: TradingView)

The project’s Relative Strength Index (RSI) still shows that there is a lot of activity surrounding the project. The RSI dropped from the overbought zone to the oversold area after the JELLY incident, which was around the time when the price itself dipped as traders started overselling the token.

However, in the hours that followed, the RSI shot back up to the overbought zone, suggesting that some traders moved in to buy the dip. This was what caused the price to recover to $15, after which it dipped to its current price, while the RSI itself dropped to the neutral value of 50.

Despite the incident, however, traders seem to still be fairly optimistic about the HYPE token, so a continued recovery is not out of the question.

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