HYPE experiences large-scale unstaking and selling, Tornado Cash-related accounts dump $6.9 million

Privacy Mixer Account Suddenly Dumps

According to the latest news, the first batch of cluster accounts related to Tornado Cash have unstaked 262,400 HYPE tokens, worth approximately $6.9 million, and have immediately started selling. This large liquidity influx suddenly entering the market puts obvious pressure on this newly launched coin since July last year. Notably, this is not a typical market sell-off, but a concentrated action from accounts associated with privacy mixing tools, which often carries specific market intentions.

HYPE Recent Bullish Sentiment Surges

Looking at this timing reveals the subtlety of the market. HYPE has recently been in a bullish phase:

• Huang Licheng (Maji) shifted funds on January 5th to increase HYPE long positions, with a position size reaching $5.38 million at an average price of $25.8
• Messari analyst holdings report shows HYPE is one of the most popular tokens, allowing most analysts to profit
• A whale opened a long position worth $32.62 million on January 5th, including HYPE holdings
• 24-hour increase of 4.59%, ranked 13th by market cap, with a circulating market cap of $893 million

Data indicates that enthusiasm for HYPE is clearly rising, with institutions and large holders increasing their positions. However, the sudden large sell-off of $6.9 million at this moment is intriguing given the timing.

Market Implications of the Large Sell-Off

This sell-off accounts for roughly 2.8% of the daily trading volume. From a liquidity perspective, a 24-hour volume of $247 million can absorb this amount, but the key concerns are the continuity of the sell-off and its psychological impact on the market.

Two points worth noting:

First, the special nature of the account. Tornado Cash is a privacy mixing tool, and large transactions from related accounts often trigger market interpretations. Such sell-offs may be seen as signals of “insiders fleeing,” though this interpretation isn’t necessarily accurate, it can influence market sentiment.

Second, the coincidence in timing. As bulls are increasing their positions, a large sell-off suddenly occurs. This could be a natural market balancing act or some participants taking profits at a high point. It’s impossible to determine if this is coordinated based on current information, but such hedging indeed increases market volatility.

Subsequent Market Reactions

Based on current information, the market may face several scenarios:

Short-term: Prices could face downward pressure, especially if the sell-off continues or more accounts follow suit. However, the $247 million daily volume provides some buffer, making a collapse from this single sell-off unlikely.

Medium-term: The key depends on the bulls’ conviction. Huang Licheng and the whale’s increasing positions ($5.38 million and $32.62 million respectively) far exceed this sell-off. If they continue to buy or hold, they may absorb this shock.

Psychological aspect: Large operations from privacy accounts can easily evoke “insiders fleeing” narratives, and this kind of public opinion pressure might have a greater impact than the liquidity shock itself.

Summary

The $6.9 million HYPE sell-off alone isn’t enough to shake the $893 million market cap, but concentrated actions from Tornado Cash-related accounts are noteworthy. This reflects a tug-of-war between bullish optimism and selling pressure. For a project like HYPE, which is relatively new, liquidity and market sentiment are fragile, and large individual actions tend to be amplified.

Key points to watch: whether more accounts follow with further sell-offs, and how the bulls (especially Huang Licheng and the whale) respond. If they continue to buy or hold, this sell-off might just be a natural market fluctuation; if they start reducing their positions, that would signal a real shift in market sentiment.