Key Points
- HYPE rose by less than 1% and is trading at $27 per coin.
- The token could retake the psychological $30 level amid plans to burn the Assistance Fund tokens.
Hyperliquid Proposes Burning Assistance Fund Tokens
HYPE, the native token of the Hyperliquid decentralized exchange, has gained under 1% in the past 24 hours, making it one of the stronger performers among the top 20 cryptocurrencies by market capitalization.
This modest uptick comes as Bitcoin, XRP and Ether show losses. It also follows an announcement from the Hyperliquid Foundation outlining plans to permanently remove 37.11 million HYPE tokens from circulation, representing 3.71% of the total supply.
The tokens earmarked for removal are held in the Assistance Fund address. That fund automatically converts trading fees collected by the perpetual-focused exchange into HYPE to buy back the native token.
According to the project team, the Assistance Fund address has no private key and therefore was never controllable through normal access methods; accessing those tokens would require an intrusive protocol change such as a hard fork. The current proposal asks validators to formally recognize the Assistance Fund HYPE as burned, establishing a social consensus that no protocol updates will be executed to reclaim those tokens.
If the governance vote passes, the community would effectively agree that the Assistance Fund’s balance is out of circulation permanently, which could tighten circulating supply and influence price dynamics.
Derivatives metrics indicate traders are increasingly bullish on HYPE. CoinGlass data shows Open Interest (OI) rose 1.63% over the last 24 hours to $1.53 billion, pointing to a higher nominal value of active positions.
In addition, the OI-weighted funding rate for HYPE moved up to 0.0839%, signaling increased buying pressure and adding further confirmation to bullish positioning among derivatives traders.
HYPE Could Reclaim $30 Soon
On the 4-hour HYPE/USD chart, the trend has been bearish and orderly after the token lost roughly 4% over the last seven days. At the time of writing, HYPE is trading just above the $26 support level.
The proposed burn has not yet been fully priced in by the market. If the community approves the formal recognition of the Assistance Fund burn and market participants react, HYPE’s price could rise in the coming days.
However, if HYPE fails to hold a daily candle close above the $26 support, downside pressure could resume and the token might extend losses toward the October 10 low near $20.
Momentum indicators show mixed signals. The RSI sits around 40, below the neutral 50 level, indicating lingering bearish momentum but not extreme oversold conditions. The MACD and its signal line are extending a downward trend, suggesting sellers have not yet fully capitulated.
Conversely, a sustained bullish recovery that produces a daily close above $26 could open the path for HYPE to climb toward the next resistance area near $34. That scenario would be more likely if the burn recognition is confirmed and traders increase long exposure, supported by rising OI and funding rates.
In summary, the proposal to formally burn tokens from the Assistance Fund is a material supply-side development that the market has not fully priced in. While derivatives data points to growing bullish interest, technical indicators still show downside risk if key support levels fail. A community-approved burn combined with improving on-chain and derivatives signals would increase the odds of HYPE reclaiming the psychological $30 level and possibly testing higher resistance near $34.