Deeply negative funding rates failed to cool HYPE, turning crowded bearish bets into fuel for a 17% rally.
Hyperliquid’s HYPE token climbed above $57 on Thursday, just eight months after its last visit to those levels, as a wave of short liquidations and ETF-driven buying pushed the token within 2% of its all-time high near $59 reached in September 2025.
The rally has turned HYPE into one of the market’s strongest large-cap performers this year, while traders pile into leveraged bets tied to the fast-growing perpetual futures platform.
How the Short Squeeze Played Out
According to on-chain analytics firm Santiment, on May 18 and 19, funding rate data across exchanges registered a sharp spike into negative territory, a sign that large numbers of traders were opening short positions and betting on a pullback.
Instead, the price kept climbing, and as it rose, those bearish traders were forced to automatically buy back their positions to avoid liquidation, which added more upward pressure rather than removing it.
The liquidation data from CoinGlass makes the damage to shorts clear. It shows that over the past 12 hours alone, roughly $21 million in HYPE futures positions were wiped out, with shorts accounting for all but $677,000 of that figure. In 24 hours, short liquidations reached $30.6 million against $1.08 million on the long side, showing just how hard the shorts got squeezed.
What makes the situation more unusual is that open interest didn’t collapse during the liquidations, as it often does. According to Santiment, HYPE’s open interest was above $1.92 billion, but data from CoinGlass shows it is now sitting closer to $2.5 billion.
This is because new traders kept stepping in to replace those who were being flushed out, and that only happens with assets that people genuinely want exposure to.
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At the time of writing, HYPE was up nearly 17% in 24 hours and more than 46% over the past seven days. Across one year, it’s up over 111%, outrunning heavyweights like Bitcoin, Ethereum, Solana, XRP, BNB, and DOGE by a significant margin.
Why Is HYPE Up?
The asset’s rally has coincided with rising institutional attention around Hyperliquid, with Santiment pointing to new HYPE-linked ETFs launched in May by Bitwise and 21Shares as one of the main catalysts behind the move.
Bitwise’s Matt Hougan also recently gushed over Hyperliquid, calling it “one of the fastest-growing financial businesses” he had seen and arguing that investors were still underpricing both the platform and its token.
Meanwhile, his colleague, Hunter Horsley, posted on May 21 that the network, as well as Solana, is forming a new category he called “revenue chains,” noting that it has generated $790 million in total blockchain revenue, ahead of Solana’s $532 million, with Tron and Ethereum following at $471 million and $425 million, respectively.
Recall that before this latest leg up, HYPE had already gained around 24% from its May 13 low near $38, partly on the back of the CLARITY Act passing on May 14 and the debut of synthetic SpaceX perpetual contracts on the Hyperliquid-linked platform Trade.xyz.
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