In an impressive display of market momentum, Hyperliquid’s HYPE token experienced a remarkable surge of 60%, climbing from $21.80 to $34.90 in just two days. This price spike was largely driven by significant institutional accumulation and a notable decrease in selling pressure following staking unlocks.
The recent rally also led to over $20 million in liquidations on bearish short positions, forcing those who bet against the token to cover their losses. Speculators are now eyeing a potential price move towards the $40 mark.
A standout contributor to this surge was Hyperliquid Strategies, a publicly listed digital assets firm trading under the ticker PURR on Nasdaq. This entity has aggressively accumulated 3.6 million HYPE tokens since December 12, leveraging Anchorage custody solutions for secure transfers. Additionally, another 460,000 HYPE tokens were transferred from exchanges OKX and Bybit on Tuesday, further solidifying the narrative of institutional interest.
Staking Unlocks Reduce Selling Pressure
Previously, selling pressure had been observed from Continue Capital, which sold 297,000 HYPE tokens two weeks prior, following a staking unlock of 1.47 million HYPE on January 21. Furthermore, wallets associated with a Tornado Cash cluster also unlocked another 1.5 million HYPE tokens, but the resultant reduced selling activity from these unlocks played a pivotal role in supporting the token’s price rise.
Investor interest was also bolstered by a recent report from ARK Invest that highlighted Hyperliquid as one of the most revenue-efficient companies globally. The report emphasized the platform’s competitive edge in the decentralized finance derivatives market, further enhancing its attractiveness to potential investors.
Platform Expansion Drives Growth
Hyperliquid has recently expanded its offerings beyond crypto perpetual contracts with its HIP-3 upgrade, now venturing into trading tokenized commodities, stocks, equity indices, and fiat currencies. This diversification has yielded impressive results, generating $3 million in fees and $25 billion in trading volume over just three months, illustrating the platform’s potential for future growth.
Notably, total open interest across Hyperliquid reached over $1 billion, with the token burning mechanism designed to remove up to 97% of protocol fees from circulation, effectively increasing the demand for HYPE tokens. The surge in commodity trading, particularly silver contracts, has also contributed to the platform’s burgeoning fee generation and user engagement.
Despite claims by Hyperliquid CEO Jeff Yan that the platform’s Bitcoin futures liquidity has surpassed that of Binance, it is worth noting that Binance currently holds a staggering $12.3 billion in aggregate BTC futures open interest. As it stands, Hyperliquid’s open interest remained unchanged at $8.5 billion on Tuesday, even as daily perpetual volumes and fees showed minor fluctuations.
Market sentiment surrounding HYPE remains palpable, with traders noting that the Relative Strength Index (RSI) has peaked at 82, indicating overbought conditions. Support levels have emerged at $30.00, while resistance is now being observed at $35.00, $40.00, and even $50.00 as traders look to the future.
However, on Wednesday afternoon, HYPE struggled to maintain levels above $34, despite a remarkable 50% gain over the past week, outperforming major players like Bitcoin and Ethereum during the same timeframe.
