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- USDC has become Hyperliquid’s dominant stablecoin as traders prioritize deeper liquidity.
- Bitcoin shows signs of capitulation, but stronger buyer demand is still needed.
- Real network activity and liquidity flows may determine crypto’s next major move.
The crypto market is entering a defining phase as liquidity trends on Hyperliquid strengthen around USDC while Bitcoin investors wait for stronger demand signals after a sharp correction. The two developments highlight a wider market theme: traders are prioritizing stability, liquidity, and real usage as digital assets navigate uncertain conditions.
Hyperliquid’s stablecoin ecosystem is undergoing a major transition, with USDC emerging as the dominant settlement asset. At the same time, Bitcoin’s latest downturn is creating signs of possible market exhaustion, though analysts warn that a true recovery may require fresh buying pressure.
USDC Takes Control of Hyperliquid’s Stablecoin Liquidity
Hyperliquid’s native USDH stablecoin has lost significant ground as traders increasingly move toward USD Coin (USDC), a more established asset with deeper liquidity. Data from DeFiLlama shows USDC now represents almost the entire stablecoin pool on the platform, holding about $5.74 billion of the $5.96 billion total.
USDH liquidity has dropped to roughly $20 million, while Tether’s USDT remains a smaller participant at around $155 million. The shift suggests that users are favoring assets with stronger market acceptance and easier settlement across trading activities.
The Hyperliquid Foundation has supported the transition with around $10 million in grants aimed at helping protocols manage migration costs. Users can also convert USDH into USDC through existing migration routes, reducing disruption across the ecosystem.
Hyperliquid Activity Supports HYPE’s Long-Term Value
Despite the stablecoin transition, network activity has remained strong. Hyperliquid continues to record thousands of daily active addresses and hundreds of thousands of daily transactions, showing that user engagement has remained steady.
Perpetual trading volume has stayed near $2.8 billion, reinforcing Hyperliquid’s position in decentralized derivatives markets. Growing trading activity also contributes to fee generation, which can support HYPE through mechanisms such as staking, buybacks, and incentives.
However, continued growth depends on maintaining strong user demand and expanding utility beyond market speculation.
Bitcoin Bottom Signals Appear, But Demand Remains Missing
Bitcoin’s recent fall below $60,000 has triggered a wave of selling from short-term holders. Around 50,000 BTC reportedly moved to exchanges at a loss, suggesting that some investors are giving up after buying during higher price levels.
The decline in short-term holder market capitalization and the return of extreme fear sentiment are often viewed as signs of market capitulation. Historically, these moments can create opportunities for stronger investors to accumulate.
Mining conditions also add pressure, with production costs reportedly above current prices. Miner stress and reduced participation have appeared in previous late-stage bear markets.
However, Bitcoin still faces a major challenge: buyers have not clearly absorbed the available supply. Exchange reserves have increased, while spot Bitcoin ETFs and digital asset treasury demand have not been strong enough to offset selling pressure.
Also Read: Hyperliquid Hit by Singapore Warning List: 5 Things Crypto Investors Need to Know Now
Hyperliquid’s growing dependence on USDC reflects the market’s preference for proven liquidity and reliable settlement infrastructure. Meanwhile, Bitcoin’s possible bottom formation remains uncertain without stronger demand. Both stories point to the same factor shaping crypto’s next phase: real market participation rather than speculation alone.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
