The dramatic rise in the value of Hyperliquid’s native token, HYPE, has drawn significant interest from both the decentralized finance (DeFi) community and institutional players. In November 2025, HYPE soared to a record $37.54, propelled by a blend of technological innovation, favorable regulatory shifts, and robust liquidity incentives. However, a subsequent drop to the $30–$31 range has sparked debate about the token’s future prospects. This review explores the on-chain factors and liquidity strategies shaping HYPE’s journey, aiming to determine whether the recent volatility marks a temporary correction or the beginning of a new growth phase.
HYPE’s impressive rally was largely attributed to the rollout of DeFi 2.0 features, such as HyperEVM and HyperCore, which significantly improved the platform’s scalability and cross-chain compatibility. These advancements helped push Hyperliquid’s total value locked (TVL) to $5 billion—a 300% surge compared to mid-2025 figures. The introduction of the HyperLiquidity Provider (HLP) program, offering annual yields of 11%, attracted a mix of retail and institutional capital.
Industry reports highlight that this initiative created a “self-reinforcing liquidity cycle,” where rising TVL encouraged more participation, thereby increasing HYPE’s utility for governance and staking purposes.
Institutional involvement further strengthened market confidence. For example, Hyperliquid Strategies Inc.—a subsidiary of the main platform—committed to staking 425,000 HYPE tokens, signaling a long-term investment approach. These actions reflect a broader DeFi 2.0 trend, where institutional-grade infrastructure and yield optimization are reshaping the competitive landscape.
Clearer regulatory guidelines have played a crucial role in HYPE’s ascent. The introduction of the U.S. CLARITY Act and the European Union’s MiCA framework provided legal certainty for DeFi activities, reducing compliance risks for Hyperliquid users. According to financial analysts, these measures have positioned HYPE as a “hybrid asset,” appealing to traditional investors seeking regulated exposure to DeFi. This regulatory alignment has broadened Hyperliquid’s potential user base and alleviated concerns over enforcement actions that have previously hindered DeFi projects.
Despite these strengths, blockchain data reveals underlying vulnerabilities. In November 2025, a major token unlock released 23.8% of HYPE’s total supply—equivalent to about $11.9 billion—into circulation, creating downward price pressure. Data from market trackers shows that the Hyperliquid team sold $2.2 million worth of HYPE during this period, raising questions about future sell-offs as monthly unlocks are scheduled through October 2027.
Detailed analysis of wallet activity in late November 2025 highlights these concerns. One unlock event distributed 1.75 million HYPE tokens (valued at $60.4 million), with 23.4% sold over-the-counter to Flowdesk, a leading market maker. While 40% of these tokens were re-staked, the remaining 36.6% added to circulating supply, contributing to a price dip to a seven-month low of $29.24. Additional team wallet activity, including the unstaking of 2.6 million HYPE ($89 million), further intensified market worries as portions were transferred to Flowdesk and other liquidity providers. These developments underscore the token’s vulnerability during large-scale distributions.
Hyperliquid’s approach to liquidity presents both strengths and challenges. The HLP program and institutional staking have provided some stability, but the platform’s reliance on buyback initiatives remains pivotal. Financial news outlets note that these buybacks have helped counteract selling pressure, though their effectiveness depends on continued TVL growth. The fact that a significant share of unlocked tokens has been re-staked suggests that long-term holders are prioritizing yield over immediate liquidity, which bodes well for market stability.
Nevertheless, technical analysis points to a cautious outlook. Indicators such as the moving average convergence divergence (MACD) and the relative strength index (RSI) suggest HYPE is consolidating, with crucial support in the $29–$30 range. Market analysts warn that a move toward $40 is unlikely unless HYPE can decisively break above $35, highlighting the need for stronger on-chain fundamentals.
HYPE’s recent price swings reflect the interplay between groundbreaking innovation and structural vulnerabilities. While DeFi 2.0 upgrades and regulatory progress have positioned the token as a bridge between decentralized and traditional finance, ongoing token unlocks and wallet movements introduce significant risks. Investors should carefully weigh the benefits of Hyperliquid’s liquidity programs against the potential for continued downward pressure, especially as monthly unlocks continue.
For HYPE to reclaim the $40 mark, Hyperliquid must demonstrate that its buybacks, institutional partnerships, and TVL expansion can outpace the liquidity challenges posed by token releases. Until then, the $29–$30 support level will serve as a key indicator of the token’s resilience in the face of volatility.