Hyperliquid Price Slides 27% as $350M Token Unlock Looms: Key Levels to Watch

Introduction

The Hyperliquid (HYPE) price is facing a critical test as a significant token unlock event collides with a persistent multi-month downtrend. Trading near $35, HYPE has seen a 27% decline over the past month, extending a slide that has placed it 41% below its September peak of $59. This downward pressure is intensifying as the market approaches a cliff unlock of 9.92 million HYPE tokens, valued at approximately $351.5 million, scheduled for November 29. With spot and derivatives volumes declining sharply, indicating waning trader interest, the key support zone between $33 and $35 is under threat. This article provides a detailed analysis of the token unlock's scale, the deteriorating technical structure, and the potential market implications for one of the most-watched assets in the decentralized exchange (DEX) sector.

A Deep Dive into the $351 Million Token Unlock

According to data from Tokenomist, the impending unlock represents 2.66% of HYPE's circulating supply. These tokens are allocated to early insiders and core contributors whose allocations were locked for one year following the Token Generation Event (TGE) in November 2024. To date, only 37% of the total HYPE supply has been unlocked, making this event a substantial one-time influx of new tokens into the circulating supply.

The scale of this unlock significantly outweighs the platform's daily buyback activities. Hyperliquid’s Assistance Fund, financed by platform trading fees, has been one of the most active buyers of its own token this year, repurchasing over $600 million worth of HYPE. Daily buybacks typically range between $2 million and $5 million, which provides underlying price support during normal market conditions. However, the sheer size of tomorrow's release—valued at over $350 million—is several magnitudes larger than this daily support mechanism, creating a potential short-term supply and demand imbalance.

Adding to market caution was Hyperliquid's recent move to unstake 2.6 million tokens. While the team has not confirmed any specific intention, many traders interpret this action as preparation for potential liquidity needs surrounding the unlock event.

Technical Analysis Reveals a Vulnerable Chart Structure

The technical picture for HYPE shows price action confined within a descending channel that has governed its trajectory since August. This pattern is characterized by a clear series of lower highs, where each rally attempt has topped out below the previous peak, and lower lows, where each decline bottoms out at a level lower than the last. This structure indicates a controlled downtrend rather than a sharp collapse.

The price is currently hovering near a critical mid-channel support area between $33 and $35. This zone has repeatedly absorbed selling pressure in recent months but is showing signs of weakening with each subsequent test. A decisive daily close below this support shelf would signal a breakdown, potentially opening the path toward the lower boundary of the descending channel in the $28 to $30 range.

Momentum indicators reinforce the bearish technical outlook. The Relative Strength Index (RSI) has remained below its midpoint for most of the past three months and is also forming a pattern of lower highs. Each attempt by the RSI to push into neutral territory has quickly lost steam, and recent price rebounds have been notably shallow and short-lived.

Volume and Open Interest Signal Trader Caution

Market activity data underscores the prevailing risk-off sentiment among traders. Over the past 24 hours, spot trading volume for HYPE fell 36% to $271 million. A parallel decline was observed in derivatives markets; data from CoinGlass shows that Hyperliquid futures volume slipped nearly 30% to $1.12 billion, while open interest eased 5% to $1.43 billion.

The concurrent drop in both volume and open interest is a significant signal. It points toward traders reducing their exposure and closing out positions rather than building new ones. This behavior is typical heading into a high-impact, uncertain event like a major token unlock, as participants prefer to de-risk their portfolios until the market's reaction to the new supply becomes clear.

Weighing the Bullish and Bearish Scenarios

In the immediate term, two primary scenarios are in focus for HYPE traders. The bullish case rests on two factors: the lower boundary of the descending channel holding as support and the market absorbing the token unlock more smoothly than anticipated. If long-term holders among the insiders choose not to immediately liquidate their positions, or if buy-side demand steps in to meet the new supply, it could alleviate selling pressure. This could provide a foundation for traders to attempt a recovery rally toward the upper band of the descending channel.

Conversely, the bearish scenario involves a soft overall market meeting a large supply injection. If selling pressure from the unlock overwhelms the existing buybacks and organic demand, it could trigger a break of the $33–35 support shelf. Such a breakdown would likely lead to a drift downward toward the next significant technical support in the $28–30 zone before any substantial price base can form.

Strategic Conclusion: Navigating Supply Shocks in Crypto Markets

The situation facing Hyperliquid serves as a critical case study on the market impact of major token unlocks. The combination of a persistent technical downtrend and an imminent, large-scale supply increase has created a high-risk environment for HYPE in the short term. The decline in trading volume and open interest clearly reflects that market participants are adopting a cautious stance, preferring to wait on the sidelines until after the unlock event unfolds.

For readers and market observers, this event underscores several key lessons:

• The Power of Tokenomics: The scheduled release of tokens is a fundamental variable that can override short-term technicals and sentiment.
• The Limits of Buybacks: While aggressive token buyback programs can provide strong support under normal conditions, they can be overwhelmed by supply shocks that are orders of magnitude larger.
• The Importance of Volume: Sharp declines in volume often precede periods of high volatility and can indicate a lack of conviction from both bulls and bears.

Moving forward, market participants should closely monitor two key developments: first, whether the $33–35 support zone holds or breaks in the days following the unlock; and second, on-chain data to gauge whether unlocked tokens are being moved to exchanges for sale or are being held in custody wallets. The resolution of this event will not only determine HYPE's near-term price direction but also provide valuable insight into market maturity in handling large-scale dilution events in the evolving DEX landscape.