Hyperliquid Price News: HYPE Is Up 124% While the Rest of Crypto Bleeds — Here’s Why

Hyperliquid (HYPE) has fully decoupled from the entire crypto market, consolidating a 124% year-to-date (YTD) while other top tokens like XRP (XRP), Ethereum (ETH), and Solana (SOL) are still neck-deep into heavy losses.

The native asset of the Hyperliquid blockchain has surged by 14.5% today, possibly as a result of a massive short squeeze.

HYPE Shorts Get Blown Up After $50 Breakout

According to data from CoinGlass, HYPE booked its fourth-largest single-day short liquidation on May 19, as the price rose above the $50 mark. A total of $24 million worth of short positions were blown up on that day, while bears keep getting pummeled this morning.

In the past 24 hours alone, another $15 million worth of HYPE short positions in the futures market have evaporated, as the price rose near the $60 mark for the first time in history.

Trading volumes have nearly doubled during this period as well, rising to $1.3 billion to account for almost 9% of the token’s circulating market cap. This reflects both the strength of the buying pressure and the intensity of this short squeeze.

One of the reasons for HYPE’s latest rally has been the platform’s updates regarding its open interest and volumes in the real-world assets (RWAs) market.

With the launch of trade.xyz, Hyperliquid set foot in the global markets by allowing users to trade stocks and commodities, among other assets, via a fully decentralized platform.

On May 17, trade.xyz announced that they will open a pre-IPO market for SpaceX perpetual futures ahead of the widely expected listing of Elon Musk’s company.

Hyperliquid’s Open Interest in RWAs Explodes to $2.6 Billion

Moreover, Hyperliquid announced earlier this week that open interest in its RWA segment increased to $2.6 billion, meaning that the platform doubled the amount of outstanding contracts in just two months.

This highlights how rapidly traders are embracing this solution, primarily as the onboarding process does not require any form of KYC, and the platform is fully transparent as it runs on the Hyperliquid blockchain.

Users simply have to connect their wallets to fund the account, and they can start trading gold, Google (GOOG) stock, or oil right away.

It was also exciting to read comments from the founder of Hyperliquid regarding some advanced conversations with lawmakers in the United States about the future of decentralized derivatives platforms.

Establishing a path to regulate these platforms would be a huge milestone for Hyperliquid that could result in millions of users onboarded in just a few months. However, a deep understanding of how DeFi works is perhaps the biggest obstacle to boosting adoption.

Volumes Spiked Last Week as HYPE’s Short Squeeze Intensified

Looking at data from Artemis, we saw a huge spike in trading volumes last week. A total of $3.1 billion worth of HYPE exchanged hands during this period, this being the highest volumes since February 8, back when the token started its ascent.

This could be the result of a combination of factors, including fear of missing out (FOMO), an ongoing short squeeze, and organic buying resulting from the platform’s rapid growth.

Hyperliquid remains the undisputed leader of the decentralized perps market in the crypto space with an open interest (OI) of $9.2 billion, which is 4.5 times higher than its closest competitor, Aster.

HYPE Reached Our Target from March – What’s Next?

Looking at the daily chart, we can see that HYPE’s latest rally started at $35, as the token bounced strongly off this level in April this year.

Back in March this year, right after HYPE broke above $35, we predicted that the token would rally to $50 over the next few weeks. If you paid attention to that article, you booked a 43% gain after that target was hit and a 72% return if you sold today.

We got four consecutive buy signals at that point, which indicated strong institutional participation in the move. Meanwhile, the Relative Strength Index (RSI) was heading to overbought territory.

Shortly afterward, the token hit $40, and then took a breather and retested that $35 area from above. That led us to the second buy signal at $35. To date, our signals system has picked up seven consecutive “buys” for Hyperliquid, emphasizing the strength of this rally.

The latest of those buy signals came up after the price action broke past the $50 mark. This is huge, as the price kept rallying after that and today. The RSI is heavily overextended by now, reaching 80 already.

HYPE Should Pull Back Soon, But the Future is Still Bright

We expect that this rally will take a breather at some point, and it wouldn’t be a bad idea to sell if you have been sitting on a profitable long position for a while. If that happens, the ideal landing zone for HYPE would be $50.

This does not mean that HYPE can’t go to $70 before it starts to pull back. We could even see it rising to $100, which would make this L1 equally or more valuable than BNB. The reason for this is that HYPE has demonstrated its use cases and its ability to expand its reach by launching new projects.

The platform has been running without any major hiccups for years now, and traders have grown accustomed to using it. Hyperliquid’s open interest is still 64% lower compared to Binance, which is a frictionless alternative for non-crypto-natives.

Hence, if it manages to make its platform much more user-friendly, its market share could rise dramatically over the following years. Especially if the U.S. clears the platform to offer its services in the country at some point.