hyperliquid

Hyperliquid (HYPE) has emerged as one of the strongest performers in the crypto market over the past two weeks, rallying nearly 70% to around $35, its highest level since December last year. The move stands in sharp contrast to the broader market trend, as Bitcoin and major altcoins such as XRP continue to face downside pressure amid a global risk-off environment.
According to data from CoinPhoton, HYPE is among the top-performing tokens in early 2026, attracting growing attention from traders who see the protocol’s business model as structurally advantaged during periods of heightened volatility.
A Rare Outperformer in a Risk-Off Market
The strength of HYPE becomes even more striking when viewed against the broader macro backdrop. Over recent weeks, risk aversion has spread across multiple asset classes, not only cryptocurrencies. Macroeconomic shocks and tightening financial conditions have triggered synchronized drawdowns across crypto, precious metals, and other risk assets, wiping out an estimated $6 trillion in global market value in the opening weeks of 2026.
In this “sea of red,” Hyperliquid stands out as a rare exception. Market data suggests that U.S.-based traders have played a significant role in driving demand, but the rally cannot be fully explained by simple capital rotation into a strong chart. Instead, the price action appears to reflect deeper structural dynamics.
Unlike most altcoins, which are primarily valued on speculative narratives, HYPE increasingly trades like an exchange-linked asset. In risk-off environments, speculative tokens are often sold aggressively, while platforms that monetize volatility can see their fundamentals improve as market turbulence increases.
Why Volatility Benefits Hyperliquid
Hyperliquid’s core product is perpetual futures (perps). When volatility rises, trading activity in perps typically accelerates as traders hedge exposure, rotate positions, speculate on price swings, and face liquidations. All of this activity generates trading fees.
Crucially, Hyperliquid’s design directly links protocol revenue to token demand.
Data from DefiLlama shows that Hyperliquid Perps recorded:
$216.29 billion in trading volume over the past 30 days
$11.78 billion in volume in the last 24 hours
$68.42 million in 30-day revenue
$834.7 million in annualized revenue
Open interest exceeding $6 billion
The Buyback Flywheel
The key mechanism lies in fee distribution. According to DefiLlama’s methodology, 99% of protocol fees (excluding builder fees) are directed into a support fund used to buy back HYPE tokens from the market.
This creates a mechanical feedback loop:
Higher volatility → more trading → more fees → more HYPE buybacks → sustained buying pressure, independent of broader market sentiment.
This structure helps explain why HYPE can behave as a “lone winner” during broad market downturns. Fear-driven trading increases volume, strengthening the protocol’s cash flow even as leverage elsewhere in the market is reduced.
Data from ASXN indicates that daily HYPE buybacks have climbed to nearly $4 million, the highest level since November. Over the past month, cumulative buybacks have exceeded $55 million.
Two key trends stand out:
Buyback intensity is accelerating — the 30-day average is approximately $1.86 million per day, while the 7-day average has risen to $2.85 million per day.
Buybacks are occurring at progressively higher average prices over shorter timeframes, suggesting tightening supply amid rising activity.
Expanding the “Volatility Surface” With HIP-3
Beyond token mechanics, product expansion has also supported HYPE’s rally. Hyperliquid is broadening the range of assets that traders can access by moving into real-world assets (RWAs) and permissionless markets through the HIP-3 upgrade.
HIP-3 opens the listing process by allowing builders to deploy new perpetual futures markets. Builders must stake 500,000 HYPE, with the risk of slashing for misconduct. This staking requirement creates a direct token sink while imposing a meaningful cost of entry for rapid market listings.
This infrastructure has already enabled Hyperliquid to expand aggressively into commodities. According to analytics platform Milk Road, Hyperliquid has captured approximately 2% of the global spot silver market within just 30 days of listing — a notable achievement that underscores the protocol’s ability to grow even during weak market conditions.
Data from Flowscan further shows that aggregate open interest across HIP-3 DEX markets has surpassed $28 billion.
The Next Growth Narrative: HIP-4
Looking ahead, the next potential catalyst is HIP-4, a proposal introducing outcome-based markets. These fully collateralized contracts settle within predefined price ranges, resembling prediction markets and limited-risk option structures.
The design aims to eliminate margin calls and liquidation cascades, offering traders capped risk exposure. DeFi analysts suggest that if outcome-based contracts can be combined with perps, traders could construct more capital-efficient strategies.
For example, a trader could hold a long ETH perpetual position while simultaneously purchasing an outcome contract such as “ETH below $2,000” as a hedge. Because the positions offset each other, margin requirements could be reduced — a feature that many existing prediction platforms do not support.
Social sentiment data indicates growing optimism around HIP-4, with expectations that new derivatives and prediction-style markets could attract additional trading volume.
Token Unlock Remains a Key Risk
Despite strong structural arguments, HYPE faces an important near-term challenge. According to Tokenomist, approximately 9.92 million HYPE tokens are scheduled to unlock for the core team on February 6, representing roughly $335 million at recent prices.
The nominal value of this unlock is equivalent to nearly 4.9 times the protocol’s 30-day revenue. While the buyback mechanism may absorb some selling pressure, the timing and pace of distribution will be critical.
If a large portion of unlocked tokens is sold quickly, HYPE could face downside pressure despite ongoing buybacks — especially if overall market risk appetite remains weak. Conversely, gradual distribution combined with sustained volatility could allow the buyback mechanism to act as a stabilizing force, turning the unlock event into a potential “buy-the-dip” opportunity.
However, if market volatility declines and trading activity slows as macro conditions stabilize, buyback yields would fall accordingly, and HYPE could revert to trading more like a conventional risk asset.
This article is for informational purposes only and does not constitute investment advice. Readers should conduct their own research and are fully responsible for their investment decisions.
👉 Follow us for more in-depth crypto market insights, on-chain analysis, and DeFi trends.
#Hyperliquid #HYPE #CryptoNews