Hyperliquid denies insider shorting; confirms ex-employee sale and 27.4M HYPE burn
Hyperliquid Labs denied claims that its team was shorting HYPE, stating the sell-off came from an ex-employee. The project enforces a policy banning team members and contractors from leveraged trading on HYPE, with violations leading to immediate termination. Separately, validators approved burning tokens acquired via automated buybacks: Hyperliquid has repurchased 27.4 million HYPE (about 11% of circulating supply, valued at roughly $942 million) and will burn all acquired and future buybacks, initiating a deflationary mechanism. HYPE has faced downward pressure from a broad market correction and ongoing monthly unlocks through late 2027; speculative open interest fell about 50% in late 2025 (from ~$2B to ~$1B), reflecting bearish futures sentiment. After the burn proposal passed, HYPE rose ~4% in 24 hours, testing $25; a decisive reclaim of $28 is cited as confirmation for a bullish reversal. Analysts note the current price has revisited the average buyback cost basis (~$13), a level that preceded a strong uptrend in Q1 2025. Traders should watch broader market sentiment and Bitcoin moves, as continued BTC weakness and upcoming monthly unlocks could limit HYPE upside despite deflationary tokenomics.
Neutral
The news is market-neutral overall. Positive: Hyperliquid’s confirmation that the dump came from an ex-employee and the enforcement ban on leveraged trading reduces governance and insider-risk concerns, while the validator-approved burning of 27.4M HYPE (≈11% supply, ~$942M) creates a meaningful deflationary tailwind that can support price over the medium-to-long term. Negative: HYPE remains under broader market pressure—speculative open interest halved (~$2B to ~$1B) indicating bearish futures positioning—and ongoing monthly token unlocks through 2027 plus Bitcoin weakness could cap near-term rallies. Short-term traders should view the 4% post-burn bounce and the $25 test cautiously; a decisive reclaim of $28 would be needed to confirm a bullish reversal. Historical parallel: past visits to the average buyback cost (~$13) preceded a Q1 2025 rally, suggesting the cost-basis level can act as a catalyst if market conditions improve. Actionable implications: short-term traders should manage risk around macro moves (BTC) and unlock schedules; swing traders may monitor buyback cost and $28 resistance for trend confirmation; longer-term investors can factor the supply reduction into valuation models but should account for unlock-related sell pressure.