Hyperliquid Burns 32,770 HYPE Tokens Worth $2.65 Million as TVL Nears $7 Billion
Hyperliquid’s native token $HYPE underwent another supply reduction this week as the protocol executed a buyback and burn of approximately 32,770 HYPE. The transaction carried a value of roughly $2.65 million at an average purchase price of $81.01 per token.
According to on-chain data, this latest burn brings the cumulative lifetime burns to 48.57 million HYPE, representing an estimated $3.82 billion at current market valuation. The removed tokens account for approximately 4.86% of the total $HYPE supply. The mechanism permanently reduces the maximum circulating supply rather than temporarily locking tokens, converting protocol-generated revenue into deflationary pressure on an ongoing basis.
While the burn mechanism continues to operate as designed, analysts note that supply reduction alone does not guarantee immediate price appreciation. Sustained revenue generation remains essential to maintain the scale and frequency of future buybacks.
Rising TVL Strengthens Hyperliquid’s Burn Engine
Underpinning the burn activity, Hyperliquid’s Total Value Locked (TVL) has climbed toward the $7 billion mark, up from a prior range near $6 billion. The acceleration began in September, pushing locked capital to near all-time highs.
Daily protocol fees continue to reach several million dollars, with periodic spikes significantly exceeding baseline levels. This combination of elevated TVL and robust fee generation provides the economic foundation for recurring $HYPE purchases. However, the burn mechanism ultimately depends on durable platform usage rather than TVL growth in isolation. A sustained alignment of capital inflows and fee generation would enhance $HYPE’s long-term supply dynamics.
Source: DefiLlama
Derivatives Traders Show Tentative Return to Long Exposure
On the derivatives front, positioning has shifted following volatile funding rate fluctuations throughout September. The $HYPE open interest-weighted funding rate briefly turned negative multiple times after September 8, but recovered into positive territory around 0.0012% by September 12, per CoinGlass data.
The reversal suggests long positions have reclaimed a slight funding premium over shorts. However, current rates remain well below the higher positive levels recorded during late August sessions, indicating renewed long exposure has not yet returned to similarly aggressive levels.
A sustained positive funding rate could support the demand outlook provided leverage remains controlled. Conversely, another move below zero would signal renewed short-side pressure.
Source: CoinGlass
$HYPE Price Action Tests Critical $78.50 Support After Channel Breakdown
Price action presents the clearest near-term risk after $HYPE failed at the $88.14 resistance zone. The rejection pushed price beneath its rising channel before finding temporary stability around the $78.65 area.
The $78.50 level has emerged as immediate structural support that will determine whether the breakdown deepens. A confirmed break below this threshold could validate a Change of Character (CHoCH) in price direction, signaling a structural shift to bearish momentum.
Technical indicators align with the weakening structure:
- MACD registered a bearish crossover accompanied by a negative histogram
- RSI cooled to 50.69 after previously reaching overbought territory during the recent advance
The RSI remains in neutral territory rather than oversold conditions, confirming the deteriorating technical structure without yet signaling capitulation. Successfully defending $78.50 could support stabilization and reopen a recovery attempt toward the $88.14 supply zone. However, losing the key support would reinforce the bearish structural shift and expose the $70 support region.
Source: TradingView
Key Takeaways
- Hyperliquid’s recurring burns continue reducing $HYPE supply as TVL approaches $7 billion
- $HYPE must defend $78.50 to avoid confirming a bearish Change of Character
