HYPE Slumps 2% as Bearish Signals Mount in Derivatives Markets

Hyperliquid (HYPE) is facing fresh selling pressure after extending its losses on Monday by more than 2%. The decline comes as broader weakness in the cryptocurrency market weighs on investor sentiment, with geopolitical tensions between the US and Iran contributing to a risk-off environment.

Institutional investors continue to pour money into HYPE-focused exchange-traded funds (ETFs), but bearish signals from the derivatives market suggest retail traders are becoming increasingly cautious. The latest data from CoinGlass shows that Hyperliquid's futures Open Interest declined by more than 1% over the past 24 hours, indicating a reduction in active leveraged positions.

The imbalance between long and short positions is further supported by a sharp decline in HYPE's funding rate, which has fallen to 0.0275%. This reflects growing preference among traders for short positions, indicating expectations of continued downside in the near term.