Hyperliquid Price Surges Above $50 Amid ETF-Driven Short Squeeze
HYPE, the native cryptocurrency of the decentralized exchange (DEX), Hyperliquid, is up 8.76 on Wednesday to trade at $52.29. A primary catalyst behind this surge can be linked to massive institutional ETF inflows from newly launched US-listed spot Hyperliquid ETFs—most notably 21Shares (THYP) and Bitwise (BHYP). Here’s how these institutional inflow could triggered the next breakout in Hyperliquid price.
HYPE Short Squeeze Above $50 Fueled by ETF Inflows
Hyperliquid’s token HYPE has broken back above the $50 level for the first time in about eight months, punishing traders who piled into heavy short positions in mid-May. Funding rates on exchanges fell sharply into negative levels on May 18-19, indicating that many of the participants are heavily betting against further increases. The price refused to drop. Instead, it pushed higher and forced the automatic liquidations that helped accelerate the rally and ultimately created a textbook short squeeze.
According to Coinglass data, today’s price jump triggered a cascading short liquidation of $13.53 million, while the general market volatility wiped out $667k from long-positioned traders.
The open interest in HYPE futures was far from trimming, and it remains at a relatively high level, surpassing $1.92 billion. This is an opposite opinion to the general perception that liquidations simply reduce outstanding positions. In fact, as the shorts were being wiped out, fresh money was being introduced as the interest remained strong. The funding rates have since returned to a more normal level, indicating that the pressure has passed, although the market is still very active.
Much of the activity in the rally comes from the recent launches by exchange-traded fund (ETF) managers such as Bitwise and 21Shares. These vehicles provide a more accessible way for traditional investors to gain exposure to the asset without directly interacting with the crypto infrastructure, contributing to greater acceptance.
Since its launch on May 12, 2026, the Hyperliquid ETF (THYP) has seen significant early investor interest and performance. The fund’s share price is up from $23.4938 to $29.86 as of May 20, representing a total return of 27.0974% on a 1,000-share holding with dividends reinvested at 3.6446%.
“The Hyperliquid ETF THYP is growing volume each day since launch in the tens of millions now, 8x over Day One, which is really good sign of organic interest,” said Bloomberg Etf analyst Eric Balchunas. He explained both THYP and BHYP had a “50% boost of volume (once again) today, headed for a combined $40m in trading.”
Balchunas also highlighted 21Shares’ THYP and Bitwise’s BHYP both saw trading volume jump 50% again, combining for roughly $40 million in daily activity. “A perfectly timed launch as EVERYTHING (stocks, bonds, gold, btc, cryptos) is down lately except the HYPE, which is up 27% since THYP’s 5/12 launch.
In the end, this episode highlights the dangers of fighting strong momentum in speculative markets. The above mentioned $50 level has a momentous look, but cryptos such as HYPE can still experience significant shifts with leverage. Bulls are still in control, but a continuing stream of inflows is needed to maintain these levels rather than squeeze dynamics.
Hyperliquid Price Attempts Recovery Beyond Channel Formation
Since last week, the Hyperliquid price has bounced from $38.170 to $52.084, projecting a gain of 36.4%. A deeper analysis of the daily chart shows this upswing as a recovery cycle within the formation of rising channel patterns.
Since mid-January, the coin price has climbed steadily with the channel’s two trendlines which act as dynamic resistance and support for market participants. With today’s price jump, HYPE coin challenges the upper boundary of this pattern, signaling a potential breakout ahead.
A potential flip of this resistance into bullish support will further accelerate the market buying pressure, and raise the Hyperliquid price towards $60.
On the contrary, if the overhead trendline provides constant resistance to buyers, the Hhyperliquid price could revert slower and continued a slower-paced recovery within channel.
