Hyperliquid Tops $50 for First Time in 8 Months as Short Squeeze Spurs Rally
Summary
- Hyperliquid's HYPE token broke back above the $50 level for the first time in about eight months, with the market citing a large short squeeze as a catalyst for the rally.
- Santiment said the funding rate turned sharply negative, while short liquidations and automated buying pressure combined to extend the price advance.
- Hyperliquid futures open interest (OI) has held at about $1.92 billion, and the launch of spot ETFs is boosting expectations for inflows from traditional finance investors.
Forecast Trend Report by Period
Hyperliquid's HYPE token rose back above $50 for the first time in about eight months, with market watchers attributing the rally to a large short squeeze.
On-chain analytics firm Santiment wrote on X on May 20 that traders aggressively built short positions in HYPE on May 18 and May 19, but the token kept climbing, triggering a short squeeze.
Funding rates across exchanges also turned sharply negative during that period, according to Santiment. That indicates many traders were betting on a decline and adding to short positions.
But as HYPE extended its gains, those shorts were liquidated in a chain reaction. The resulting forced buying added further upward pressure to the price.
Open interest has also remained elevated. Hyperliquid futures open interest currently stands at more than $1.92 billion.
Santiment said open interest often declines after large liquidations, but Hyperliquid has held at a high level as new positions continue to enter the market.
Recently launched exchange-traded funds linked to Hyperliquid were also cited as a driver of the advance. Bitwise and 21Shares launched spot Hyperliquid ETF products last week.
The ETF launches allow traditional finance investors to gain exposure to HYPE without using a wallet or a decentralized exchange, or DEX, Santiment said. The firm added that the market increasingly expects Hyperliquid to expand beyond a simple decentralized finance, or DeFi, platform into an ecosystem more friendly to institutional investors.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.
