- Hyperliquid’s price rose 6.5% even as most major coins declined.
- HYPE’s rally is driven by token buybacks and the rollout of the Base Liquidity Pool (BLP).
- However, a risky technical formation has emerged, suggesting a possible pullback.
The Hyperliquid index token (HYPE) posted a sharp gain despite a broader market downturn, drawing renewed attention to one of the month’s stronger performers.
While many leading assets faced heavy selling pressure, HYPE moved higher thanks to growing demand, large-scale buybacks, and rising activity across the Hyperliquid ecosystem.
Still, even as sentiment around the altcoin turns bullish, technical analysts caution that the rally may not be as secure as it appears.
Buybacks and BLP rollout fuel momentum
HYPE’s recent price advance can be largely attributed to rapid progress on the Hyperliquid Base Liquidity Pool (commonly called BLP) testnet, launched on Hypercore, the layer-1 chain that powers the exchange.
The BLP rollout marks a significant infrastructure upgrade for the protocol, introducing more efficient liquidity routing and additional yield mechanisms.
The testnet has injected new energy into the Hyperliquid ecosystem. The platform is positioning itself not only as a fast, on-chain exchange but also as a hub for tokenized stocks such as Nvidia, Tesla and SpaceX, attracting new users and boosting activity at a time when many platforms are seeing slowdowns.
Another major force behind HYPE’s surge is the exchange’s aggressive buyback program.
Hyperliquid has executed buybacks exceeding $1.3 billion, removing more than 28 million HYPE tokens from circulation.
Reducing supply places upward pressure on the token, especially as long-term holders lock more HYPE into staking contracts.
Staked balances rose nearly 60% in a month, easing sell-side pressure and strengthening market confidence.
The supply tightening coincides with Hyperliquid’s expanding role in the global derivatives market.
The exchange now commands over a 6% share of the perpetual futures market, putting it alongside centralized leaders like Binance, OKX and Bybit.
This expansion brings higher fee revenue, additional buybacks, and firmer fundamentals for HYPE.
Chart signals warn of a potential pullback
Despite robust fundamentals, technical indicators are flashing cautionary signals.
A classic head-and-shoulders pattern has been forming on the daily chart since June.
The pattern’s neckline sits near $35.50, a level that has repeatedly acted as key support. A decisive break below this area could push HYPE toward the next support zone just above $30.
Risk rises further as the 50-day and 200-day moving averages approach a bearish crossover, commonly referred to as a death cross.
That formation typically signals a shift into a deeper downtrend, particularly when it appears during periods of market uncertainty.
Nevertheless, HYPE is holding above $40, which indicates demand remains healthy, and a sustained move above $46 could negate the bearish setup.