AVAX Price and Open Interest Crash, HYPE Token Underperforms in Crypto Market Decline

The cryptocurrency market experienced significant declines early Thursday, with Ethereum (ETH) dropping over 3% to fall below the $4,000 threshold. This downward movement triggered substantial liquidations across the market, including a multimillion-dollar loss for a major investor. Bitcoin (BTC) similarly declined 1.5% to $115,600, nearly erasing gains from Wednesday's recovery. The bearish sentiment extended to other major cryptocurrencies amid falling Nasdaq and S&P 500 futures, potentially influenced by increasing concerns about a possible U.S. government shutdown. Recent top performers including ASTR, AVAX, and PUMP suffered particularly heavy losses, with double-digit declines over 24 hours. Market analysts observed cryptocurrencies acting as early indicators for broader financial market shifts. "Crypto is once again signaling changes in risk appetite," noted Alex Kuptsikevich, chief market analyst at FXPro. "We've seen altcoins and smaller developed market currencies weakening since the Federal Reserve's recent rate cut, with major U.S. indices following this trend from Tuesday." **HYPE Token Underperformance** The Hyperliquid HYPE token is significantly underperforming the broader crypto market, primarily due to growing competition from BNB Chain-based derivatives exchange Aster and concerns about upcoming token unlocks. Aster, backed by YZi Labs, surpassed Hyperliquid in daily perpetual trading volume this week, creating ripples throughout the on-chain trading ecosystem. Aster's open interest skyrocketed 33,500% in just one week, jumping from $3.7 million to $1.25 billion. Its 24-hour trading volume reached $35.8 billion—more than double Hyperliquid's $10 billion according to DeFiLlama data. Total value locked (TVL) on Aster nearly tripled to $1.85 billion. The platform's ASTER token surged over 344% in the past week to $2, achieving a fully diluted valuation of $15.9 billion. Meanwhile, HYPE dropped to $43 from $58.4. The decline coincides with investor anxiety over upcoming token unlocks scheduled for late November, when 237 million HYPE tokens (worth over $10 billion at current prices) will gradually become liquid over a two-year period. **Derivatives Market Analysis** Open interest in futures for many major tokens declined over the past 24 hours, with AVAX experiencing the sharpest drop at nearly 12%. Despite this, BTC futures positioning remains elevated near record highs. ETH futures OI increased to 14.45 million ETH despite significant liquidations on Hyperliquid. SOL perpetuals denominated in USDT and dollars saw slight OI increases from 29 million to 30.28 million SOL as spot prices approached $200, suggesting some traders are shorting the decline. Several coins including XRP, SOL, HBAR, TRX, SUI, and XLM showed negative funding rates, indicating bearish short positioning. On CME, BTC futures OI resumed its downtrend while ETH futures OI returned to record highs above 2.2 million ETH. The annualized three-month basis for ETH dropped to 7% from 9.8%, signaling weakening bullish pressure. On Deribit, BTC and ETH put options continue to command premiums over calls, reflecting bearish sentiment, with some traders acquiring out-of-the-money ether puts via Paradigm OTC desk.