$HYPE Revenue is trending down, but the price hasn’t followed. I’m still leaning bullish, but I’ll wait for confirmation rather than chase here.

Key data: Hyperliquid revenue in October was about $69.13 million, down 6.8% from roughly $74.19 million in September. Over the same period, Gate perpetuals rose from about $76.6 nine days ago to around $85.6 now, up more than 10%.

Let’s start with the core contradiction. People who value HYPE based on revenue are now saying the token price has run ahead of fundamentals. They’re half right. DefiLlama’s daily revenue surged to about $4.87 million on October 29, the day the news broke, then fell to around $3.74 million on the 30th, back to about $1.24 million on the 31st, and roughly $1.23 million on November 1. The buzz has definitely faded. But the price hasn’t fallen back to where it was before the news; it’s still holding above the old $80–$82 range. Either the market is pricing in the HIP-3 story early, or sentiment hasn’t fully faded yet. I lean toward the former, but the price action still needs to prove it.

Gate perpetuals: three data points.

First, price. It’s currently around 85.6, down about 2.3% over 24 hours. The daily high is 89.03 and the low is 85.28, with about 33.17 million U in 24-hour trading volume. The daily candle on the 29th rallied from 80.6 to 97.03 on roughly 206 million U in volume. It then closed around 89.0, 90.0, and 88.0 over the next three days. Today is the first time it has fallen below 86.

Second, open interest and funding rate. The one-hour period starting at 2 p.m. today saw a spike in volume—about 4.26 million U—as the price was driven down from 87.6 to around 85.5. Aggressive selling clearly outweighed aggressive buying. Oddly, the open-interest contract count didn’t fall; it actually rose from about 54.97 million to about 55.37 million contracts, with a notional value of roughly 474 million U. Long liquidations were only about 34,000 U, a very small amount. The funding rate remains slightly positive at 0.005% every 8 hours. Put simply, this wasn’t longs fleeing; it looks more like someone opened short positions on the way down. By account count, more than 70% of large traders are short; by contract count, longs and shorts are about even, at roughly 1.12 to 1.

Third, the BTC backdrop. Bitcoin is around 77,900, virtually flat over 24 hours, in a range of 77,600 to 78,800. HYPE’s drop has nothing to do with Bitcoin; it’s digesting the move on its own.

My take: the drop in revenue is real, but I don’t see it as the end of the trend. The kind of daily revenue seen on the 29th was never going to happen every day. Returning to a little over $1 million a day is roughly the norm before the news. As long as the price holds above 82, it means the valuation premium driven by the news hasn’t been given back. The positions added on the short side this afternoon could, in fact, become fuel. My plan is to wait for the price to reclaim 87.6—the starting point of the big red candle at 2 p.m.—while open interest holds steady, and then consider going long. I’m not chasing it around 85; I’ll wait for the market to show its hand.

The conditions that would prove me wrong are quite specific. If the daily candle closes below 82.4—that is, back below the high before the rally on the 29th—my bullish thesis is invalidated, and the news-driven valuation premium will have been completely erased. Another way I could be wrong is if the price gradually recovers while open interest keeps falling. That would mean shorts are closing, not that new longs are entering, so I wouldn’t count a rally like that.

Three signals to watch next.

First, after the U.S. stock market opens tonight, does HYPE move with tech stocks? Weekend volume is thin; tonight will be the real test.

Second, with open interest at around 55.37 million contracts, if the price falls further, does it keep rising or start declining? An increase means shorts are building positions; a decline means longs are pulling out.

Third, can daily revenue get back above $2 million? If it can’t, support at 82 will look increasingly shaky.

A follow-up check. On Saturday, tuba wrote about HYPE and said the invalidation condition was a high-volume break below 86.3 accompanied by falling open interest. This afternoon, the price condition was met—it fell to 85.28—but the open-interest condition wasn’t; the contract count actually increased. So I can only call this half wrong: I definitely overestimated the price. This morning I wrote about MINIMAX, saying not to chase it around 22.2. It later peaked at 22.48 and is now back around 21.56, so anyone who chased it got a small gain and then gave it back. The call not to chase held up.

One last question: revenue is back to pre-news levels, while the price is still above where it was before the news. Do you think HYPE is pricing in HIP-3 early, or has the sentiment premium not been fully squeezed out yet?

This is only an observation of market activity, not a recommendation.