HYPE faces dual pressure: $328 million unlock adds to technical downside

Hyperliquid (HYPE) faces multiple pressures on the eve of a key unlock event tomorrow. Approximately 12.46 million HYPE tokens are set to unlock on January 6, valued at $328 million at current prices, accounting for 3.61% of the circulating supply. Meanwhile, HYPE’s price has fallen over 50% from its September 2025 high near $59, and is now in a clear downtrend channel with limited short-term rebound momentum. The market is reassessing the actual impact of the unlock event.

Unlock Pressure and Market Sentiment

How significant is the supply shock?

According to the latest news, the 12.46 million HYPE tokens unlocking represent 3.61% of the current circulating supply. In absolute terms, this is a considerable increase in supply. However, from another perspective, approximately 38% of the total supply has already been released, indicating that the project has entered a relatively mature token release phase, and the supply shock from a single unlock is relatively manageable.

More importantly, the market has fully anticipated this unlock. Historical experience shows that token unlocks with clear expectations often undergo a pre-event adjustment, and the actual selling pressure may have been absorbed in advance. Looking at HYPE’s volatility over the past week between $24.03 and $27.18, it seems the market has already priced in the unlock event.

Signals from Trading Activity

Data shows that HYPE’s trading activity has significantly increased. 24-hour spot trading volume rose by 52% to about $236 million; futures trading volume increased by 28% to $1.21 billion, with open interest slightly up to $1.43 billion. This combination typically indicates that the market is building new positions rather than engaging in large-scale liquidations.

In other words, traders’ behavior ahead of the unlock appears more like “waiting and positioning” rather than “definitively betting on a trend reversal.” This suggests that the market’s attitude toward the unlock risk is relatively calm, and panic sentiment has not noticeably increased.

The Hedging Effect of the Deflationary Mechanism

Impressive burn scale

The supply pressure on HYPE is not one-sided. Protocol revenue continues to be used for buybacks and burning HYPE, which offsets some of the new supply through this deflationary mechanism. In late December alone, about 37.5 million tokens worth over $900 million were burned in a single event. This means the amount burned in one go is three times the amount set to unlock tomorrow.

More critically, this burning process is ongoing. Daily buyback volumes remain stable, indicating that the protocol’s revenue continues to be steady. In the long term, this deflationary mechanism provides substantial support to HYPE’s supply side.

The true picture of supply and demand

Comparing the 12.46 million tokens to the daily burn scale reveals that market anxiety may be overestimated. Although the unlock increases supply, ongoing burns reduce supply as well, creating a certain balance.

Key Technical Support Levels

Current pattern and trend

From a technical perspective, HYPE remains in a downtrend with lower highs and lower lows, trading below medium- and long-term moving averages. The Bollinger Bands are narrowing, indicating a potential upcoming major move. RSI has rebounded to around 50, suggesting weakening bearish momentum but no reversal yet. This shows that while downward momentum is diminishing, a reversal signal is not yet strong enough.

Key price level analysis

In the short term, the $24–25 range is a critical support zone to watch, as it also represents the lower bound of the past week’s volatility. If the price falls below this support after the unlock, it could trigger larger sell-offs. Conversely, if support holds, a rebound toward the $29–30 resistance zone would be a true test of resistance.

Summary

While the HYPE unlock event introduces supply pressure, the market has already fully priced in this event, and trading activity reflects more of a “wait-and-see” stance rather than panic. The deflationary mechanism’s offsetting effect should not be overlooked, as daily burns far exceed the single unlock volume. Technically, although the downtrend has not reversed, bearish momentum is waning. Tomorrow’s unlock is more likely an “expected event” rather than a black swan. The market’s real focus should be on whether the $24–25 support can hold and whether the price can subsequently break back above the $29–30 resistance zone.