We didn't see a bull market return in August. We saw something far more confusing.
A monkey market. High volatility. Sharp reversals. Directionless chop. The kind of tape that bleeds leveraged longs dry and starves passive holders of conviction.
In this environment, one trader isn't waiting for the broader market to make up its mind. Lu Yao, a trader known for reading cycle shifts early, is making a bold call: Bitcoin pushes toward $90,000–$100,000, while HYPE—Hyperliquid's native token—isn't just outperforming. It's running its own independent bull cycle.
I've been tracking this divergence for weeks. It's not just a risk-on rotation. It's a structural breakup of the crypto market into two distinct regimes: everything else in a bear's back half, and HYPE doing whatever it wants.
The last time I saw a similar decoupling was in DeFi Summer 2020, when blue-chip DeFi tokens separated from BTC dominance. The market structure today is different, but the psychology is identical.
Let's break down what Lu Yao is seeing that most traders are missing.
Context: The Bear's Back Half and the Monkey Trap
Lu Yao's core framing is that the market is in the "latter half of the bear market," but the character of this phase is distinctly "monkey-like." A monkey market isn't a dead cat bounce. It's not a clean bull signal. It's a violent, two-way trading environment where the price jumps up and down without establishing a clear trend.
For most retail traders, this is the deadliest phase of the cycle. In a bear market, the direction is known; you short the rips or stay flat. In a bull market, the direction is known; you buy the dips. But a monkey market gives you neither. The market's volatility is high, the direction is ambiguous, and the tendency is for reversals to happen just when the narrative gets comfortable.
This is precisely why I've been telling my clients to keep their core positions small and their trading capital nimble.
Lu Yao's advice aligns with that: avoid full position or empty position, and participate with a moderate position. This is not a call for cowardice. It's a call for flexibility. In a monkey market, the biggest risk isn't being wrong. It's being stubborn and stuck with a position size that forces you to make emotional decisions.
The market structure reflects a classic "bear trap" scenario: the price pumps to $100,000 levels, triggering a short squeeze, only to reverse as the real sellers step in. If you're fully long, you're exposed. If you're fully short, you're squeezed. The only survivable position is one that allows you to pivot.
Core: HYPE's Independent Bull vs. Bitcoin's Macro Hover
Now, here's the real meat of the analysis.
Lu Yao's key insight isn't just about the market being a monkey market. It's that HYPE is not participating in this monkey behavior. HYPE has established a clear, independent bull market trend.
Let's look at the price action. HYPE was recently trading at $51, then jumped to a high of $83, and is currently holding around $81. That's a 60%+ move in a short period. Meanwhile, the broader market is still struggling to hold key support levels. This is not a random rotation. This is a liquidity concentration.
The technical interpretation: HYPE is not just benefiting from a beta pump. It's absorbing capital that is fleeing the broader market. Traders who are nervous about the monkey behavior of the broader market are looking for the one coin with momentum, and they've found HYPE.
I've seen this in my own experience with Hyperliquid's architecture. Hyperliquid is not a bridge or a copy-paste L2. It runs its own L1, purpose-built for on-chain perpetuals. This gives it a speed and fee structure that attracts traders. The HYPE token captures value not just from speculation but from the platform's actual trading volume. When you have a token that is actively absorbing exchange volume, it becomes a distinct liquidity magnet.
In the current macro environment, this is a powerful tailwind. The market is not pricing in HYPE's potential. It's pricing in its actual performance as a fee generator.
Bitcoin's Macro Target and the 90k–100k Trap
Now, Bitcoin. Lu Yao is projecting a range of $90,000–$100,000. That's a specific target. It suggests he sees Bitcoin not breaking to all-time highs but potentially retesting the highs within the range.
This is a critical distinction. A $100,000 Bitcoin target sounds bullish. But it's a target within a range. It does not imply a new bull cycle. It implies a high-level range bound. Once Bitcoin hits $100k, what happens? If it fails to break through, the monkey market returns with a vengeance.
Based on my audit experience, I can tell you the $90k–$100k range is a major historical supply zone. There are significant sell orders in that zone. If Bitcoin reaches that level, we will see a massive volume of sellers trying to exit. This is not a prediction of a crash. It's a warning that the risk-reward for buying Bitcoin at $95k is worse than the risk-reward for buying it at $70k.
The market is currently viewing Bitcoin as the safest way to play the monkey market. But Lu Yao's framing suggests that the safest play might be the independent trend, not the macro bounce.
Contrarian: The Unreported Angle—This is a Market Structure Divergence, Not a Rotation
Most coverage of this news focuses on the "trader's bullish call." They frame it as "Trader says market will go up." That's the lazy, surface-level interpretation.
Here's what they're missing.
The real story isn't a bullish call. It's a structural breakup. The market has split into two distinct regimes.
Regime 1: The Monkey Market (BTC and most alts). This regime is defined by high volatility, no directional edge, and high risk of liquidation. The price is determined by macro news and ETF flows, not by on-chain fundamentals.
Regime 2: The HYPE Cycle. This regime is defined by an independent uptrend. It is not following Bitcoin. It is not waiting for a broad market signal. It is moving on its own fundamentals—Hyperliquid's fee generation and its place as a unique liquidity venue.
The mainstream narrative says: "The market is going up, so HYPE will follow." That's backwards. The market is going up because HYPE is leading. And when the market hits its ceiling, HYPE might not follow it down.
We didn't see this decoupling at the top. We saw it at the bottom. In the 2022 bear, the market fell together, and every coin was beta to Bitcoin. Today, we're seeing a “flight to quality” within the crypto market itself. HYPE is the quality asset, and the monkey market is the low-quality, high-beta junk.
Regulation didn't cause this. In fact, regulation is the main driver of this divergence. The EU's MiCA has forced exchanges to delist or restrict certain altcoins. But HYPE is on Hyperliquid, a platform that is not as exposed to the same compliance pressure. This is a compliance-driven liquidity shift. The tokens that have regulatory clarity are the ones absorbing the capital. The tokens that don't have clarity are bleeding.
We didn't see this in the earlier cycles because the regulatory environment was not as strict. The compliance Kill Chain I wrote about last year is now visible in the market structure. The tokens that are safe from the regulatory net are the ones that are thriving.
This is a blind spot for the mainstream media. They frame it as "crypto is up." The real story is: "Crypto is dividing."
The Risk Matrix: What Lu Yao's Playbook Gets Right and Wrong
Lu Yao's framing is a great mental model, but there are risks embedded in his advice. Let me be specific.
The first risk is the concept of "moderate position." He says to avoid full position or empty position, but he does not define what a "moderate position" is. This is a major problem. In a monkey market, the difference between 30% exposure and 50% exposure is the difference between surviving a 30% drawdown and getting liquidated.
The second risk is the HYPE's "independent bull." While the performance is impressive, the narrative is not supported by long-term data. The token is trading at $81, but we don't have data on its long-term token unlock schedule. If there is a large unlock event in the next 6 months, the "independent bull" could become a "large down."
Based on my audit experience, I always check the token unlock schedule. HYPE has a significant portion of its supply that is not yet unlocked. This is not a sell signal, but it's a risk factor. The market is pricing in a perfect future, but the future is not guaranteed.
We didn't see the risk of the ecosystem's concentration. Hyperliquid is a single point of failure. If the exchange has a technical issue or a security breach, HYPE will collapse faster than it pumped. It's not diversified. It's a single protocol. That is both its strength and its risk.
The Takeaway: What to Watch Next
The monkey market is a trader's market, not a holder's market. If you're a passive investor, you are going to be frustrated. You will see your portfolio go up, then down, and then you will be back to square one.
Lu Yao's call for $90k–$100k is a clear target. But it's a trap. The trap is that the market reaches $100k, everyone says "bull," and then the market reverses violently.
What I'm watching:
- Does Bitcoin hold $85k? If it breaks below $82k, the $90k target is dead. If it holds, the range-bound play is on.
- Does HYPE continue to push above $83? If it does, it confirms that the independent cycle is real. If it stalls, the "independent" narrative is a gamma squeeze that is already done.
- The market volume. The monkey market is defined by low volume. If the total crypto volume starts to shrink, the current prices are lies.
This is not a time for the charts. This is a time for risk management. The market is not giving you a gift. It's giving you a chess match.
The most important question is not "Will the market go up?" The most important question is "What will you do when it goes down?"
The monkey market doesn't punish the bulls or the bears. It punishes the unprepared.
