Is the HYPE selling pressure really about to run out? Analysts reveal market misconceptions, leading to a 16% price rebound

From a plunge from $45-50 down to $20, the decline of HYPE has caused many to worry about further selling pressure. However, crypto analyst Ericonomic recently published an article pointing out that there are significant misconceptions in the market’s perception of HYPE. According to on-chain data, the three major sources of selling pressure are nearly exhausted or have been addressed, which subsequently boosted market confidence. HYPE responded by rising above $25.7, with a 24-hour increase of 16.2%.

The “Trap” in Market Perception

Unlocking, distribution, and selling cannot be equated

Most trackers show that approximately 9.9 million HYPE tokens are released each month, leading many to believe there is about $200 million in monthly selling pressure. But Ericonomic points out that this assumption is fundamentally wrong.

On-chain data reveals the real situation: only 7-10% of the initial unlocked HYPE tokens are used for market selling, while the rest flow into OTC trading and staking. This means that although the unlocking volume appears large, the actual selling pressure entering the open market is much smaller than market expectations.

The current state of the three major sources of selling pressure

Liquidation in the derivatives market has basically been completed

By Q4 2025, the derivatives structure for HYPE was unhealthy, with long positions dominating. As the price continued to decline, most aggressive long positions had already been liquidated. Although there are still over $150 million in long positions with liquidation prices below $15, the downward pressure caused by leverage has largely dissipated.

The liquidation strategy of Tornado Cash clusters is nearing completion

Initially, 16 address clusters involved in HYPE financing through Tornado Cash accumulated about 4.4 million HYPE tokens at an average price of approximately $8.8 per token. This supply amounts to roughly $80 million.

Since early January, this entity has employed a highly mechanized liquidation strategy: unlocking about one wallet per day. Fully selling off would theoretically push HYPE’s price below $10. However, in practice, when the Tornado Cash clusters aggressively sell on-chain, market makers like Wintermute immediately start arbitrage, selling the HYPE pressure they absorb to multiple off-chain large buyers.

Over the past 30 days, Wintermute has arbitraged over $70 million worth of HYPE. On-chain data shows these buyers include institutions like Resolv Labs, Auros Global, and others. This dynamic balance effectively suppresses further price declines.

Shift in market sentiment

Ericonomic’s analysis has sparked widespread discussion in the crypto community. When the market realizes that the selling pressure is not as large as imagined and that these pressures are gradually diminishing, market sentiment shifts accordingly.

Based on relevant data, this shift has indeed occurred. Currently, HYPE is priced at $25.86, with a 16.91% increase over the past 24 hours and a 7-day gain of 9.21%. This indicates that market outlooks are improving.

Summary

The panic triggered by HYPE’s sharp decline from its high was largely due to misconceptions about selling pressure. Ericonomic’s analysis reveals a key fact: token unlocking, distribution, and selling are three distinct concepts and should not be conflated. On-chain data shows that the three major sources of selling pressure are nearly exhausted or have been effectively managed. This change in perception is driving market sentiment from pessimism to optimism, and the recent price rebound reflects this shift. The key going forward is whether these selling pressures can truly continue to diminish as expected.