Hook: The Tale of Two Markets
The numbers hit my screen at 2:47 AM Madrid time. Bitcoin was holding its ground above the psychological $60,000 handle, and somewhere in the Pacific, a trader named Lu Yao was on X, sharing a breakdown that would immediately split the market into two separate universes. One universe is the broader crypto market, which Lu Yao insists is still gnawing its way through the bone-dry carcass of a bear cycle. The other universe is HYPE—the native token of the Hyperliquid perpetuals DEX—which is apparently living in a completely different dimension.
In the last 48 hours, HYPE went from $51 to $83. At the time of Lu Yao's interview on August 26th, it was hovering around $81. For context, that's a 62% move in what I can only describe as a whisper-quiet timeframe for most other assets in the top 100.
This is the kind of divergence that gets people asking the wrong questions. They ask, "Should I buy HYPE?" or "Is the bear market over?" But the real question is much more visceral: How can the market be in the monkey phase—that chaotic, swinging, erratic state between bull and bear—while a single token is already sprinting through a bull cycle of its own?
I have spent years mapping the liquidity veins of the DeFi ecosystem, and this split-screen phenomenon is the loudest signal we have. It tells us that the market is no longer a single entity moving on a single tide. It's a fractal. It's broken into micro-climates, and navigating it requires not just a map, but a new type of navigation. Let's break down the monkey market mechanics and dissect where the next whisper is coming from.
Context: The "Monkey Market" Framework
Lu Yao's key framing—the "Monkey Market" (猴市)—isn't a new term, but it's a relevant one. In Chinese trading culture, the bull (牛) and the bear (熊) are the classic binaries. The monkey is the anarchist in the middle, swinging wildly from branch to branch, creating violent upward and downward moves without a clear directional trend.
I have seen this pattern before. In 2019, the market was a classic monkey: Bitcoin rallied from $4,000 to nearly $14,000, while the broader altcoin market remained in the mud, failing to follow through. The market has a nervous energy in these periods, characterized by high volatility but also a shallow depth. It's a market that gives you money, then takes it away, then gives it back, just to test your resolve.
Lu's stance is clear. The bear cycle hasn't ended. The monkeys are just playing in the ruins. He believes the market is in the latter half of the bear phase, which is the most dangerous phase because it's the one that fools you into thinking the party is starting again.
The key numbers from Lu's analysis: he expects Bitcoin to trade in the $90,000 to $100,000 range. This is not a wild, euphoric target. It is a technical, retracement-level target. It suggests a bounce—a "relief rally"—but not a new all-time high. This is the signature of a trader who respects the bear market's gravity but is willing to trade the bounce.
He also stresses the "position" aspect: avoid being full or empty. This is a pivot away from maximalism. It's about survival.
But the most intriguing part is the "independent bull market" he attributes to HYPE. In a world of strong, correlated altcoins, HYPE is moving to its own drum. In this monkey market, HYPE is the one that got into the banana truck.
Core: The HYPE Paradox—Trading in a Vacuum
As a news cheetah, I chase the speed, but I also chase the truth. Let's talk about HYPE. The token is the native asset of Hyperliquid, a decentralized perpetual contracts exchange that built its own Layer-1 blockchain to maximize performance and speed.
The Visceral Data of HYPE's Move
From a technical standpoint, HYPE is currently price-discovering. It has broken its previous highs and is now operating in "price discovery" territory where there is no visible overhead resistance—only blue sky and thin order books.
- Current Price: ~$81
- Recent Range: $51 to $83
- Market Structure: Strong uptrend, with bullish indicators on multiple timeframes.
But here's the catch that many of us miss when we see a green candle: Why is it moving?
In my experience, reading the pulse of the market, there are two forces that drive an asset to new highs in a bear market:
- The Pure Financial "Velocity" — When an asset generates revenue (like a perp DEX), the protocol's native token can become a proxy for the yield. If the DEX is printing fees, the market rewards the token.
- The "Narrative Vacuum" — When the rest of the market is boring and choppy, liquidity needs a home. It searches for assets with momentum. HYPE becomes the "hot" stock on the board, and the liquidity veins of the ecosystem pump into it simply because it's the only thing showing a pulse.
Lu Yao's view suggests he sees this as a distinct cycle for HYPE. He isn't saying it's a safe asset. He is saying that, in this macro environment, HYPE is trading on a different time signature.
### The Independence Trap I believe the market is making a subtle mistake in calling this "independence." It isn't independent of the market; it is the dark matter of the market. If Bitcoin were to suddenly plunge—say a sharp rejection from the $70k zone—the liquidity shock would ripple through the entire system. HYPE would feel it. In crypto, nothing is truly an island.
However, the current movement is powered by a specific algorithmic momentum. HYPE is a high-beta play. When the system is up, it goes up 5x. When the system is down, it falls harder.
Based on my audit experience, I see HYPE as a "short-term momentum tool" for traders. The "monkey market" is the perfect environment for this. The market is swinging, but HYPE is a swing that swings longer.
Core: Deconstructing the Bitcoin Prediction and the Monkey's Swing
Let's get technical. Lu Yao's call for Bitcoin at $90k-$100k is the anchor of this analysis. This isn't a prediction of a new bull market; it's a target for the swing.
Mapping the Bitcoin Liquidity Map
For Bitcoin to reach $90,000, it needs a 30%+ move from the $68,000-$69,000 range. In a monkey market, this is entirely possible. It doesn't require new retail participants, a rush of institutional money, or a spot ETF approval. It requires a liquidity hunt.
- Liquidity Squeeze: When the market is in a monkey phase, the direction is driven by liquidity—typically, the market moves to collect liquidity from the order books.
- The Spring: The market often "springs" in the opposite direction of the most crowded trade. If the crowd is short, the price rises to $90k to liquidate those shorts.
- The "Bull Trap" Function: $90k-$100k is a prime bull trap zone. It's high enough to make the "HODLers" feel vindicated, but it's not a new all-time high, which makes it the perfect zone to distribute.
Lu is essentially saying: The market will give you hope (the $90k move), but it won't complete the promise (the new ATH). This is the ultimate monkey behavior—it offers you a banana but with an apple.
### The "Appropriate Position" Strategy His advice to "avoid full positions or empty positions" is a key strategy for this environment. This is not about "being in the market" or "being out of the market." It is about maintaining optionality.
- Full Position: If you're fully loaded and the monkey swings down, you are trapped.
- Empty Position: If you're empty and the monkey swings up, you're living with the FOMO.
- Partial Position: You are the monkey—you can swing with the market.
This aligns perfectly with the "emotional resilience" I’ve seen in the best traders. The market is a psychological war.
Contrarian Angle: The Overlooked "Ghost" of the Monkey—The Unconfirmed Narrative
Here is where I add the layer to Lu Yao's analysis that no one else is seeing.
Lu calls HYPE an "independent bull cycle." But what if we're looking at the wrong metric? What if this "independence" isn't a bull cycle, but rather a "Supply-Demand Shock" dressed in bull clothing?
The Hidden Truth: Unlocked Liquidity, Not "Value."
Let's look at the HYPE tokenomics. If the market is indeed in a bear phase, the liquidity in the market is limited. But HYPE is the native token of Hyperliquid. Hyperliquid is a perps exchange. It uses its native token for gas and as a core collateral asset in many cases.
Here’s the part where I step in with my own technical experience: *In a bear market, the volume on these perps exchanges increases. Volatility is a feature, not a bug.* When traders are shorting and longing in a monkey market, the fees on Hyperliquid skyrocket.
The Unseen Link: - Bear Market → High Volatility → Hyperliquid Generates Fees → The Fees Buy Back and Burn HYPE or Distribute it → Price Rises.
The price is not rising because of a "narrative" or "community feel." It is rising because of the gushing of fee generation. If the volume dries up, the "narrative" breaks.
This is not a "private bull cycle." This is an "Industrial Utility Cycle." The market is confusing the "fog" of the bear market with the "alpha" of the fee engine. The real signal to watch is not the HYPE price, but the Hyperliquid fee flow and the volume.
The Contrarian "Whisper" of the L2: The Data Availability (DA) layer is one of the most overrated narratives in this cycle. But the actual Layer-1 of Hyperliquid is a very specific design choice. It is not a "generalized" L1—it is a dedicated L1 built for one function: speed. If the speed breaks, the HYPE breaks.
While the crowd is looking at Bitcoin and thinking "monkey," I'm looking at the perps DEX market share. If HYPE's success causes users to migrate from GMX or dYdX, this is a transfer of "veins." It's a zero-sum game in the bear. The HYPE is just stealing the liquidity from other protocols. The "independence" is just a relocation of the existing market liquidity. This is the signal before the pump, not the confirmation.
Takeaway: The Next Watch Signal
The market is a chessboard where the monkey is playing checkers. Lu Yao's forecast is a useful map: expect $90k-$100k Bitcoin, expect choppy waters, and expect the monkeys to jump.
But the next watch is not Bitcoin. The next watch is the Hyperliquid fee generation.
If the HYPE price continues to climb but the volume on the Hyperliquid exchange falls, the "bull" is on life support. If the volume is rising along with the price, the "monkey" is still swinging.
This is the key to the market. In a monkey market, you don't just be a monkey. You become the one who watches the monkey.
Where liquidity flows, value finds its home—even in the monkey jungle.