HYPE Token Faces Downside Pressure Amid Supply Unlock and Strategic Treasury Moves

Hyperliquid's HYPE token is trading near $32, down over 7% in 24 hours and 11% weekly, as a recent supply unlock and fragile market structure increase downside risks. Technical analysis shows the token forming lower highs with fading momentum, with key support levels in the low-$30s and high-$20s now at risk of breaking.

The market vulnerability stems from a significant token unlock on November 29, where approximately 9.9 million HYPE tokens (roughly 2.6% of circulating supply) were released to insiders and contributors. This one-off supply event has created an overhang that appears to outweigh the steady daily buyback demand from Hyperliquid's Assistance Fund, which has spent over $600 million on token purchases this year.

Market dynamics show concerning signs with spot trading volume shrinking by about a third from recent highs and derivatives open interest easing. This combination of low spot volume and high leverage creates conditions prone to sudden price movements. The daily RSI remains in the high-40s, indicating an undecided market without clear bullish or bearish control.

In a separate but related development, Hyperliquid Strategies Inc. executed a major treasury management move on December 4, transferring 12 million HYPE tokens (worth approximately $411 million) from HyperEVM to Hypercore across 32 wallets. The company also allocated 425,000 HYPE (valued at $14.5 million) to staking balances in three wallets, representing 1.2% of total supply and 3.54% of circulating supply.

This strategic shift signals long-term orientation rather than short-term speculation, with the treasury potentially preparing for more active staking and yield-oriented strategies. Hypercore serves as the engine of the Hyperliquid L1 blockchain, handling low-latency perpetuals and spot trading through a fully on-chain central limit order book.

Market sentiment remains divided, with some viewing HYPE as merely lagging the broader market while others see it as part of a broader shift away from high-beta assets. Notably, whale trader 0xBd8c maintains a $30 million long position on Hyperliquid with $10 million in margin, already up $2.5 million with a liquidation price at $22.50.

The immediate technical outlook suggests a retest of the high-$20s remains the base case, though a reclaim of the $36-$37 distribution zone could signal seller exhaustion and open path toward $40+ if accompanied by improved market flows and funding conditions.