‘Conviction’ test ahead – Can Hyperliquid survive a 7.8M HYPE unlock?

The timing of token unlocks plays a crucial role in shaping how the setup unfolds.

Notably, when tokens are already showing signs of technical exhaustion, any fresh supply entering the market can accelerate a deeper correction.

Hyperliquid appears to exemplify this dynamic, following a sharp 37% weekly rally that pushed the token to a $64 all-time high.

With the Relative Strength Index (RSI) already in overbought territory, the market is now anticipating the release of 7.88 million $HYPE tokens this week. This represents nearly $500 million in potential selling pressure, which could act as a trigger for a pullback and place $HYPE at a key inflection point.

Source: Hypurrscan

According to AMBCrypto, this is where timing starts to become critical.

From a technical standpoint, despite signs of overextension, $HYPE continues to push higher, already up nearly 2% this week as it approaches the $64 resistance level.

However, the market remains split on whether a sharp correction could follow, as upcoming token unlocks may intensify profit-taking, with the added supply potentially deepening any pullback.

That said, the technical picture alone doesn’t tell the full story. On-chain signals also come into play.

To assess whether this move is strategic or not, it’s important to examine how investors are positioning ahead of the 7.66 million Hyperliquid [$HYPE] token unlock.

$HYPE unlock puts rally to the test as spot demand holds firm

The “hype” around Hyperliquid isn’t simply driven by short-term capital rotation.

From a technical standpoint, the $HYPE/BTC ratio posted a sharp 20%+ single-day jump on the 20th of May, which initially appeared to be a standard rotational move as the broader market leaned into a risk-off environment. However, on-chain data tells a different story.

As shown in the chart below, $HYPE perpetual funding on Hyperliquid sat at just 0.006%, while spot volume surged to $209 million over the past 24 hours. This implies a perp-to-spot ratio of 5.1x.

Rather than leverage-driven speculation chasing price, this suggests genuine spot capital rotation.

Source: TradingView

Meanwhile, whale accumulation continues to accelerate.

With $1.16 billion in buybacks already in motion and a whale recently deploying $15.1 million to acquire 238k $HYPE at $63.24, analysts argue that $HYPE’s “flippening” resistance narrative is shifting from speculation to real positioning.

In this context, the upcoming 7.8 million $HYPE unlock appears “strategically” timed.

As a result, a sharp supply shock could act as a catalyst for $HYPE to break into new all-time highs.

Final Summary

$HYPE faces a $500 million token unlock, but strong spot buying and whale accumulation are still supporting price action despite overbought signals.

Buybacks and large whale inflows suggest the unlock could act as a liquidity event, potentially fueling a move to new highs instead of a sharp correction.