Remember that moment when you thought the worst was over, only to watch everything slide again the next day?
That’s exactly how the past week has felt for anyone holding Hyperliquid’s native token HYPE token. After briefly kissing $35, price slammed straight back down and is now wobbling just above $31–$32. The bounce looked promising for about five minutes. Then reality kicked in.
I’ve been watching this chart for months, and honestly, this is one of those setups where the data is screaming caution louder than the Twitter bulls are screaming “buy the dip.”
Why the $32 Level Feels Like a Trap Right Now
Let me paint the picture without sugar-coating it.
HYPE is currently trading with a fully diluted valuation north of $10 billion while doing less than $300 million in real daily spot volume on most days. That alone should raise eyebrows. When valuations get this detached from organic flow, any bounce tends to be short-lived and leverage-driven.
And leverage? Oh boy, there’s plenty of it.
Open Interest Refuses to Budge
Despite price dropping almost 50% from the all-time high near $59, perpetual futures open interest across major venues is still sitting at levels we saw during the blow-off top. That’s not normal in a healthy correction.
Usually when price falls hard, OI collapses as positions get wrecked. Here it has barely blinked lower, sure, but it’s still enormous relative to spot activity. Translation: a ton of traders are still stubbornly long with leverage, praying for a squeeze that never quite arrives.
When open interest stays elevated while spot volume shrinks, you get exactly what we’re seeing now, violent wicks in both directions and no real trend.
Every small rally gets met with aggressive shorting at the top of the range, and every dip gets bought aggressively, but only by leveraged longs trying to defend their liquidation prices. It’s a tug-of-war with dynamite in the middle.
The Token Unlock Elephant in the Room
On November 29 roughly 9.9 million HYPE tokens (about 2.6% of circulating supply) vested in one giant cliff for team, advisors, and early contributors.
Yes, the Hyperliquid Assistance Fund has been buying back tokens aggressively all year, sometimes $5–10 million worth in a single day, but absorbing a single 300+ million dollar slug of new supply in one go is a completely different beast.
So far the fund has kept the bid alive, but on-chain data shows distribution wallets moving tokens to exchanges in chunks over the past seven days. Not panic selling, but steady, methodical pressure. Exactly the kind that grinds price lower without causing dramatic candles that scare away shorts.
Spot Volume Is Anemic
Here’s a stat that keeps me up at night: average daily spot volume over the last week is down roughly 35% from the November peak.
- Peak daily spot: ~$950 million
- Current daily spot: ~$250–$320 million
- Perpetual volume still > $4 billion notional
That mismatch is textbook late-stage leverage bubble behavior. The real money (spot buyers) has quietly left the building, leaving only degens fighting over funding rates.
Technical Structure – Still Bearish
Zoom out and the chart is painfully clear.
Since the summer highs, HYPE has been carving a textbook descending channel. Every rally has produced a lower high, and every bounce has been shallower than the last. We’re now testing the lower half of that channel for the third time.
Key levels I’m watching:
- Immediate support: $30.50–$31.80 (multiple daily closes here)
- Major zone: $27.50–$29.00 (previous range low + high-volume node)
- Upside invalidation: sustained break and close above $37.50
Until we reclaim $37.50 on decent spot volume, I simply can’t get structurally bullish. Everything below that still looks like lower-probability bounces inside a downtrend.
Whale Watching – The $30 Million Gamble
One position in particular has the entire Hyperliquid community holding its breath.
Address 0xBd8c… is long roughly $30 million notional HYPE at 3x leverage using only $10 million collateral. Liquidation sits around $22.50. As of today he’s up about $2.5 million unrealized, but the position is so large it’s become a market meme.
If price holds and squeezes higher, he becomes legend. If we break $28, the forced selling from that single account could easily take us straight to the low $20s. It’s the kind of asymmetric risk that makes leveraged perpetual markets so addictive, and so dangerous.
Funding Rates and Basis Tell the Real Story
Funding on most venues flipped negative briefly this week, something we haven’t seen since the summer lows. That tells me shorts are finally getting confident enough to press.
When funding goes negative in a token that still has massive long OI, it usually ends one of two ways:
- Longs panic, funding flips violently positive, squeeze city.
- Shorts keep pressing, longs slowly bleed out, price grinds lower with occasional dead-cat bounces.
So far we’re firmly in scenario 2 territory.
What Would Change My Mind?
I’m not married to the bear case. Markets change fast. Here’s what would make me flip bullish quickly:
- Spot volume surging above $600 million daily for 3+ days
- Daily close above $37.50 with expanding OI (real new longs, not just short covering)
- Visible exhaustion of unlock selling (on-chain flows turning net positive)
- Bitcoin stabilizing or breaking new highs, dragging high-beta alts with it
Until at least two of those happen? I’m staying cautious.
Price Scenarios – My Base Case
Short term (next 7–14 days):
- 65% probability: Grind lower toward $27–$29, possible overshoot to mid-$20s if whale liquidations cascade
- 25% probability: Range-bound chop between $30–$35 while unlock supply gets absorbed
- 10% probability: Surprise squeeze back to $40+ if macro rips and spot buyers return
Medium term (into Q1 2026):
If Hyperliquid keeps executing (new listings, vault products, deeper liquidity), and the Assistance Fund actually absorbs the bulk of the unlock, I think $50+ retest is very realistic. But we’re not there yet. The market needs to digest this supply first, preferably with lower prices.
Final thought: Great projects often trade at stupid prices before they trade at fair prices. The question is whether you have the stomach to buy when the chart looks broken and Twitter is screaming “dead coin.”
Right now, the chart still looks broken. And that’s okay. Sometimes the best entries feel the worst.
Trade safe out there.
(All opinions are my own and not financial advice. Crypto is extremely risky. Never leverage more than you can afford to lose.)
