HYPE token surges as Hyperliquid taps metals trade

HYPE tokens emerged from their recent local lows, rising above $27. Hyperliquid boosted activity on HIP-3 markets based on a rush to trade precious metal perpetual futures.

HYPE surged closer to its higher range for the past month, bouncing from its recent local lows. The token rallied to $27.61 after Hyperliquid increased its activity based on precious metal trading. HYPE surged by over 27% in a single day, becoming one of the top gainers in crypto.

The HIP-3 markets saw a surge in activity, as whales could easily pivot from crypto to the surging gold and silver markets. The rally in precious metals replaced previous hopes of an altcoin market or a recovery of top memes. 

Hyperliquid open interest still stands at $7.21B, after attempts to regain higher levels. In the past weeks, there has been a notable rotation from crypto trading into silver and gold, expecting the metals to continue their winning streak. 

HIP-3 trading on Hyperliquid brings whale traders to metals

HIP-3, the fully permissionless trading platform built by Hyperliquid, quickly managed to adopt metals trading and tap into the current hype. 

On the market platform, open interest is at $816M, with $18.69B in volumes for the past month. The platform also gauges the interest of traders for its permissionless custom markets. 

As of January 27, the most actively traded HIP-3 asset was silver, with $165.3M in open interest. Silver had two markets with a slight price disparity. 

On HIP-3, stocks and metals surpassed crypto pairs as the biggest activity hubs. The rotation replaced the usual crypto shift between BTC and major altcoins, instead using the infrastructure to build immediate representation for other markets and more active assets. 

The perpetual futures are still settled in crypto and do not confer ownership. However, the market offers immediate, international, and permissionless access to speculate on the price of silver. Activity on HIP-3 shows on-chain trading will not stall, but instead find new sources of growth. 

Will the rotation into metals reverse? 

The rotation into metals is creating an expectation that once the peak rally has ended, traders may return to crypto. 

For now, silver is still ahead of ETH as the most traded asset, but there are signs of whales betting on a reversal. 

A whale recently opened a XYZ: silver short position, with a dramatic 20X leverage. The position has a $135.93 liquidation price, and currently carries over $4.7M in unrealized loss. The whale opened the total short position over the past 12 hours, after rotating out of ETH. 

For now, the position is an outlier and a rarity among whales. The current market structure also shows metals are seen as a speculative opportunity by crypto traders, rather than a long-term store of value. For silver, the all-time high prices are seen as an anomaly, and crypto on-chain traders have different objectives compared to spot buyers.

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