Hyperliquid prepares for $316 mln unlock – Investors split on price reaction

Key Takeaways 

Why did the team unstake 10M tokens? 

It’s intended for the token unlock scheduled for the 29th of November. 

What are the market expectations? 

Mixed. Large players expect a 10% dip to $28, while other analysts projected a rebound at $30. 

The team behind Hyperliquid has reportedly unstaked $316 million worth of HYPE ahead of the token unlock scheduled for the 29th of November. 

According to a pseudonymous analyst, Avseenko, most players were either farming HYPE through its DeFi ecosystem or shorting it. However, he cautioned that there was no strong bidding from the spot markets. 

Tokenomist data showed that about 3.6% of HYPE circulation, or 10 million HYPE, will be unlocked over the weekend to support the founders and team. 

It’s one of the major unlocks to be tracked this week, given the project’s success and the FUD it has caused in the past. 

Source: Tokenomist 

In the next 24 months, Hyperliquid [HYPE] will have monthly unlocks.

Even at the current pace of buyback, crypto investor Arthur Hayes warned that it could leave over $400 million of supply overhang, outweighing the HYPE value.  

Assessing HYPE market positioning

As of writing, HYPE traded at $31.4, down by 47% from its prior all-time high of $59.4. On the incoming unlock, the market was pricing a potential 10% downside move to $28. 

Source: Laevitas

According to Options data, the $28 level had the highest volume of put activity (hedging against downside moves, red bar). 

Put differently, large funds and players expected HYPE not to drop below $28 over the weekend after the unlock. 

On the price charts, the level was a breakout point (white zone) during HYPE’s explosive recovery early this year. Perhaps market participants expected it to act as support and potentially trigger a rebound. 

Source: HYPE/USDT, TradingView 

That being said, HYPE has seen significant accumulation over the past seven days of trading.

According to CoinGlass, the net inflows were red over the period, suggesting that more HYPE tokens left exchanges than moved in. Put differently, more people moved off their HYPE for self-custody — A bullish sign. 

Source: CoinGlass

Overall, the mixed accumulation and Options positioning meant that there was no market consensus that the unlock would significantly drag the HYPE price lower, as crypto sentiment suggested.

In fact, one analyst, Teng Yang, echoed a similar sentiment and said, 

“IMO the team will sell tokens, but impact probably not as steep as people fear (e.g. OTC, slow drip). More diamond-handled compared to if this were a VC unlock.”