Hyperliquid’s latest HYPE burn reduced the token supply as the growing activity strengthened the mechanism, enhancing recurring market buybacks.
Importantly, the total lifetime burns hit 48.57 million HYPE, which represented approximately $3.82 billion using the current price valuation. The removals accounted for about 4.86% of HYPE’s total token supply.
The mechanism therefore continued converting the protocol-generated revenue into permanent reductions in HYPE token supply. Interestingly, each completed burn reduced the maximum circulating supply rather than temporarily locking tokens away.
However, the supply squeeze activity alone would not guarantee an immediate price appreciation. Therefore, sustained revenue generation remains crucial to maintain the scale and frequency of future purchases.
Rising TVL strengthens Hyperliquid’s burn engine
Behind the HYPE burns, Hyperliquid’s total value locked had climbed toward the $7 billion region at the time of writing.
Notably, the TVL previously hovered around $6 billion before accelerating sharply during September. This increase brought locked capital near its highest level.
Meanwhile, the daily fees continued to reach several million dollars, with occasional spikes considerably exceeding the normal levels.
This combination strengthened the burn outlook because the protocol activity provided the economic foundation behind the recurring HYPE purchases.
An elevated sustained activity could provide additional fees and potentially support the continued token removal activity.
However, the burn mechanism would still rely on durable platform usage rather than TVL growth alone. Therefore, a sustained collaboration of capital and fee generation would enhance the HYPE’s long-term supply dynamics.
Source: DefiLlama
Are derivatives traders rebuilding long exposure?
On the derivatives side, the positioning also shifted after various sharp funding fluctuations during September sessions. The
HYPE’s OI-weighted funding rate briefly moved negative several times after September 8. However, by September 12, the rate recovered into positive territory around 0.0012% , according to CoinGlass data.
The reversal suggested that long positions had reclaimed a slight funding premium over the shorts.
The current positioning, however, remained far below the higher positive rates recorded during the late August sessions. Therefore, the renewed long exposure had not yet hit this similarly aggressive levels.
Ultimately, a sustained positive funding could support the demand outlook, as long as leverage remain controlled. However, another move below the zero threshold would instead indicate renewed short-side pressure.
Source: CoinGlass
HYPE breakdown puts $78.50 under scrutiny
HYPE price action introduced the clearest near-term risk after the token failed around the $88.14 resistance zone.
The rejection at that level pushed Hyperliquid price beneath its rising channel before it stabilized around the $78.65 area.
Importantly, the $78.50 price level emerged as the immediate structural support determining whether the breakdown would deepen.
A confirmed break below this important level could confirm a Change of Character (CHoCH) in price direction.
Notably, selling pressure was evident through the MACD indicator, which registered a bearish crossover with a negative histogram. Besides, the RSI indicator also suggested cooling conditions towards 50.69 after previously hitting the overbought territory during the recent price advance.
The indicators confirmed the weakening technical price structure rather than contradicting the channel breakdown. Even so, the RSI indicator remained around neutral territory rather than entering oversold conditions.
Successfully defending the $78.50 could likely support stabilization and reopen a recovery attempt towards the $88.14 supply zone. However losing the key support would reinforce the bearish structural shift, exposing the $70 support region.
Source: TradingView
Final Summary
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Hyperliquid’s recurring burns continued reducing HYPE supply as TVL approached $7 billion.
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HYPE must defend $78.50 to avoid confirming a bearish Change of Character.
