Hyperliquid (HYPE) Plunges Below $15 Amid JELLY Delisting Fallout and Centralization Concerns
Hyperliquid’s native token (HYPE) has experienced a significant downturn, falling below $15 with a nearly 10% drop in the past 24 hours, as the decentralized exchange faces intense scrutiny following the controversial delisting of the JELLY token due to alleged market manipulation.
The incident has sparked widespread criticism regarding Hyperliquid’s governance model and raised concerns about its claims of decentralization, leading to a loss of trust among some traders.
Hyperliquid Delists JELLY Perpetual Futures After $13 Million Market Manipulation Attempt
The latest upheaval around Hyperliquid results from an event involving the JELLY token, a somewhat new cryptocurrency introduced as part of a Web3 social media project. Combining short bets on Hyperliquid with on-chain spot buys, a trader allegedly performed a complex move that resulted in a $13.5 million unrealized loss for Hyperliquid’s automated market maker vault (HLP). Hyperliquid’s validator responded by setting convened and voting to delist the JELLY perpetual futures, therefore forcibly closing all positions and settling the market at a price much below the going decentralized exchange rates.
Critics Slam Hyperliquid’s Centralized Response, Comparing It to FTX 2.0
The crypto community has spoken strongly against Hyperliquid’s unilateral delist of JELLY and force-settle positions. Critics—including well-known personalities like Bitget CEO Gracy Chen and BitMEX co-founder Arthur Hayes—have questioned the platform’s distributed character.
Chen went as far as implying that Hyperliquid might be on a road to become “FTX 2.0,” citing the “immature, unethical, and unprofessional” handling of the matter and the hazardous precedent set by the forced residence. Similar ideas were expressed by Hayes, who said the episode revealed Hyperliquid’s centralized approach of governance.
Hyperliquid’s Validator Set Votes to Delist, Sparking Debate on DeFi Governance
Hyperliquid justified its actions by claiming that delisting was a required step to stop a possible $240 million liquidation endangering its whole liquidity pool. Considered in charge of network governance, the platform’s sixteen validators all voted for delisting.
Although Hyperliquid’s Hyper Foundation promises to reimburse most impacted users—except from those flagged for suspicious activity—the incident has sparked a discussion on the degree of centralization in DeFi systems such as Hyperliquid, where a small group of validators can make such significant decisions.
Binance Lists JELLY Futures, Adding Another Layer to the Drama
Shortly after Hyperliquid’s delisting, Binance, the biggest cryptocurrency exchange globally by trading volume, declared the listing of perpetual futures for the JELLY token, therefore adding still another layer to the developing drama. This action drove JELLY’s spot price to soar by nearly 560%, so underscoring the volatility and the controversial character of the circumstances.
HYPE Token Suffers Double-Digit Drop as Trust in Hyperliquid Wanes
The JELLY delisting fallout directly and negatively affects the native token price of Hyperliquid, HYPE. The HYPE token price dropped by about 16% within hours of the incident and the following criticism; it has been trading down by almost 10% in the last 24 hours, presently hovering at $14. With some traders apparently removing assets and looking for alternative distributed exchanges, this sudden drop suggests a possible eroding of confidence in the platform.
HYPE/USD Technical Analysis: HYPE Token Experiences Sharp Decline, Testing Support Levels
The sudden drop of the HYPE token below $14 marks a major negative action. The price has been gradually declining after trading at a high of around $15.5 yesterday, suggesting considerable selling force. This decline has exceeded predicted short-term support levels, and should negative sentiment continue, more downside is likely.
Now trading well below its all-time high of $35.02 attained in December 2024, the HYPE token suggests a possible change in market mood toward the platform. Traders will be especially keenly observing for any indications of stabilization or reversal in the next days as well as for possible support levels developing.
Conclusion: Can Hyperliquid Rebuild Trust After JELLY Fiasco?
The sudden delisting of JELLY and the consequent price drop of the HYPE token have clouded Hyperliquid’s reputation and begged major doubts about its distributed character. Although the quick response of the platform would have prevented a possible financial disaster, the scandal has surely tarnished user confidence and spurred a critical discussion on DeFi’s governance. Now Hyperliquid is fighting uphill to win traders’ trust and show its dedication to decentralization values.
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