HYPE Explodes with $72 Million in Institutional Funds in a Week, Will it Conquer the $80 Mark?

▲ Hyperliquid (HYPE), USD/ChatGPT generated image ©

Hyperliquid (HYPE), which continues its relentless dominance by breaking all-time highs day after day amidst the high volatility of the global cryptocurrency market, is now entering a full-fledged price discovery phase thanks to an explosive inflow of institutional funds and the effect of large-scale token burns, raising expectations for further price increases.

According to investment media FXStreet on May 25 (local time), Hyperliquid, the native token of the decentralized exchange (DEX), surged 7% the previous day and was trading above the $60 (USD) mark on Monday, reaching an intraday all-time high of $64.48. This recent strong momentum is largely due to Hyperliquid's emergence as an all-in-one platform encompassing cryptocurrencies, real commodity products, and prediction markets, going beyond being just an exchange. Driven by this growth, HYPE-centric Exchange Traded Funds (ETFs) launched by global asset managers 21Shares and Bitwise saw a net inflow of a staggering $72.38 million in institutional funds last week alone, demonstrating a dramatic expansion in institutional demand compared to the $2.52 million inflow the previous week.

The aggressive actions of institutional investors are leading to increased participation from retail traders, heating up the derivatives market. According to data from CoinGlass, a derivatives market data analytics platform, HYPE futures open interest reached an all-time high of $2.95 billion on Monday, proving that the notional value of unliquidated contracts has soared to unprecedented levels, indicating strong position building. Furthermore, a robust token buyback policy linked to exchange revenue is inducing a supply shortage, acting as a powerful catalyst for price appreciation. Hyperliquid reinvests an absolute majority, 97% to 99%, of its own trading fees into HYPE token purchases and freezes them in a support fund. Data from virtual asset analytics platform Hyperscreener shows that approximately 210,000 HYPE tokens were permanently removed from the circulating supply through buybacks last week alone, and a total of 44.52 million tokens are currently locked in the support fund, including 26.81 million tokens from buybacks.

From a technical analysis perspective, Hyperliquid's future outlook points to a perfect upward trend. The current HYPE price is comfortably above the short-term, medium-term, and long-term trend lines: the 50-day Exponential Moving Average (EMA) at $45.07, the 100-day EMA at $40.98, and the 200-day EMA at $37.87, indicating that it is passing through a strong bull market phase. With a 7% surge on Sunday, it broke through the previous intraday high resistance level of $59.45, suggesting it has entered a true price discovery mode with no overhead supply. Although the Relative Strength Index (RSI) on the daily chart recorded 75, signaling a short-term overbought condition, the Moving Average Convergence Divergence (MACD) and signal line are both drawing expanding curves in the positive territory, indicating that the short-term upward momentum remains robust.

Accordingly, market experts predict that if Hyperliquid maintains its current steep rally, it could easily reach the $80 mark, passing through the next key resistance level at the 127.2% Fibonacci extension of $70.04 and ultimately reaching the 161.8% level of $83.51. Conversely, even if a temporary pullback (correction) occurs during the day due to profit-taking from short-term overheating, the $59.45 level, which has transformed from a resistance line to a strong support line, is expected to act as the primary defense. Even if selling pressure intensifies and the primary support line breaks, the psychological bottom line of $50.00 forms a strong secondary floor. Given the solid underlying institutional buying demand, experts' dominant view is that the downside risk is very limited.

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