Hyperliquid Bears Face ‘Classic Short Squeeze’ Risks: Can HYPE Hit $100 Next?

Hyperliquid’s HYPE token is showing signs of a short-squeeze-driven breakout, with technicals now pointing toward a possible move to $100.

HYPE Shorts Risk getting squeezed as price rises

On Thursday, HYPE’s price reached a new record high above $75 after rallying by around 200% year-to-date. However, derivatives positioning shows traders are still not fully convinced by the move.

Alphractal’s long/short ratio chart shows HYPE’s price climbing while the long/short ratio has fallen close to 1.

In simple terms, traders are not aggressively chasing the rally with longs. Instead, many appear to be betting against the move by opening short positions.

That creates a potential short squeeze setup, according to on-chain analyst Rei.

“The crowd disbelieves this upward momentum and is continuously piling into Short positions to catch the top,” the analyst said in a Tuesday post, adding:

“This massive volume of Short positions serves as liquidity, providing the perfect ‘fuel’ to pump the price of HYPE even higher through forced liquidation waves.”

For the unversed: When an asset keeps rising while traders remain heavily short, those short sellers can be forced to close positions if the price moves against them. Closing a short requires buying back the asset, which can add more upside pressure and accelerate the rally.

Since May 20, HYPE short liquidations have reached roughly $126.28 million, nearly double the $68.85 million in long liquidations.

The imbalance suggests bearish traders have been forced to buy back their positions as HYPE climbed, adding fuel to what appears to be a classic short squeeze.

The bigger warning sign for bulls may come later, if the crowd flips aggressively long and the long/short ratio rises sharply. That would suggest traders are no longer fighting the rally and may instead be chasing it.

HYPE Bull Pennant Breakout Targets $103

The technical chart also supports the bullish setup.

HYPE appears to have broken out of a bull pennant pattern on the daily chart. The structure formed after a strong May rally, followed by a tight consolidation phase near the highs. Such patterns often act as continuation setups when the price breaks above the upper trendline.

The measured move target from the breakout sits near $103, based on the height of the prior rally added to the breakout zone.

HYPE is also trading above its key daily moving averages, including the 20-day (green), 50-day (red), 100-day (purple) and 200-day (blue) exponential moving averages (EMA), keeping the broader trend constructive.

Still, the rally is not without risk. The daily relative strength index is near 75, signaling overbought conditions. That does not invalidate the breakout, but it raises the odds of short-term pullbacks before any clean move toward $100.

Should it happen, the HYPE price may drop toward its 20-day EMA near $60.