As of May 22,, HYPE increased by approximately 15% in a single day, reaching $58.97 during trading hours, with a year-to-date increase of about 134%. Even more impressively, against the backdrop of Bitcoin down 12% and Ethereum retracing 30% this year, HYPE's strong counter-trend rally has become a rare bright spot in the market, with short positions being liquidated for as much as $30.6 million within 24 hours.

From the driving factors, this round of rally is supported by multiple positive fundamentals. First is the comprehensive opening of institutional channels—21Shares and Bitwise successively launched HYPE spot ETFs, with a total net inflow of about $54 million in the seven days before listing, and the pace of institutional entry even surpassed that of the Bitcoin ETF earlier this year, based on market cap adjustments. Bitwise also announced that 10% of the management fee for BHYP ETF will be used for continuous buy-and-stake of HYPE, creating stable long-term buying pressure. Grayscale-related wallets accumulated about 682k HYPE in a week, also choosing immediate staking, while a16z-related whales bought a total of 2.34 million HYPE over six weeks, with a total investment exceeding $100 million, and each purchase was immediately staked and locked, significantly reducing the circulating supply in the market.

Meanwhile, the product upgrades of the Hyperliquid platform itself are opening up a new valuation ceiling. The implementation of HIP-4 upgrade allows the platform to cover perpetual contract trading for crypto, commodities, RWA, and even pre-IPO assets. The open interest in RWA contracts has exceeded $2.6 billion, a new high, doubling from two months ago. Coupled with the cooperation agreements with Coinbase and Circle, USDC as an AQA asset provides stable cash flow, and the protocol’s 97% fee mechanism for continuous buyback and burn of HYPE creates a closed-loop positive feedback: “business expansion—more users—higher income—stronger buyback.”

However, the most exciting part of the rally is the unexpected short squeeze. Between May 18 and 19, the futures market funding rates turned sharply negative, with many shorts betting on a price correction, but instead, the price rose, and forced liquidations pushed the price even higher. The trader Loracle, considered the largest short in HYPE, with 5x leverage, saw his short position’s unrealized loss expand to $23 million, ultimately closing with a realized loss of $6.99 million. Within 24 hours, about $30.6 million in shorts were liquidated, and open interest not only did not decrease but broke through $2.5 billion, indicating new inflows of capital continuing to replace liquidated positions. On the same day, institutional addresses related to a16z and Grayscale continued to add to and lock in positions against the trend, reflecting a deep divergence between bullish and bearish sides on this chain.

Regarding whether to chase at the current price, with $58.97, it is only a step away from the September 2025 high of $59.33, and multiple technical indicators are already in overbought territory. More concerning is that about 9.92 million HYPE, worth approximately $572 million, are scheduled to unlock on May 29, which will pose a real test to the short-term price. For long-term investors, the logic of Hyperliquid’s transition from a single perpetual contract DEX to an on-chain comprehensive asset trading platform has not yet been fully priced in, and the trend of continuous institutional entry and locking positions remains intact. But for short-term traders, chasing the high now carries significant risk; a more rational approach is to wait for a pullback to key support levels or to build long positions gradually to average into entry costs.

This independent rally of HYPE fully demonstrates that, in a generally cooling market environment, assets with real business growth, compliant capital channels, and a strong tokenomics model are becoming the main targets for capital to flock to. However, behind high-leverage long-short battles is always a brutal zero-sum game, and short-term market sentiment often diverges from fundamentals. Which side you choose depends on how you view the deep disagreement between bulls and bears, and how much of a retracement you are willing to accept to benefit from the “counter-trend rally.”