Deeply negative funding rates failed to slow HYPE’s momentum, as crowded bearish positions instead fueled a powerful rally that pushed the token within touching distance of a new all time high.
Hyperliquid token HYPE surged above $57 on Thursday, marking its return to those levels for the first time in eight months. The sharp rally came as heavy short liquidations and growing ETF related demand pushed the asset to within 2% of its previous record high near $59 reached in September 2025.
The latest surge has positioned HYPE as one of the strongest performing large cap cryptocurrencies of the year, with traders increasingly piling into leveraged positions linked to the rapidly expanding perpetual futures platform.
How the Short Squeeze Unfolded
According to analytics platform Santiment, funding rates across exchanges turned sharply negative on May 18 and 19, signaling that a large number of traders were aggressively betting on a price pullback by opening short positions.
Instead of falling, however, HYPE continued climbing. As prices moved higher, bearish traders were forced to buy back their positions to avoid liquidation, creating even more buying pressure and accelerating the rally.
Data from CoinGlass highlighted the scale of the squeeze. Over the past 12 hours alone, approximately $21 million worth of HYPE futures positions were liquidated, with short sellers accounting for nearly all of the losses except about $677,000.
Over a 24 hour period, short liquidations climbed to roughly $30.6 million compared to just $1.08 million in long liquidations, underscoring how heavily bearish traders were caught off guard.
What made the rally even more notable was that open interest did not collapse during the liquidations, which is typically expected in such scenarios. Santiment previously reported HYPE open interest above $1.92 billion, while CoinGlass data now places the figure closer to $2.5 billion.
The increase suggests that fresh traders continued entering the market even as others were forced out, a sign of sustained demand and growing investor appetite for exposure to the asset.
At the time of writing, HYPE had gained nearly 17% in the last 24 hours and more than 46% over the previous week. Over the past year, the token has surged more than 111%, outperforming major cryptocurrencies such as Bitcoin, Ethereum, Solana, XRP, BNB, and Dogecoin.
What Is Driving HYPE Higher
The token’s rally has coincided with growing institutional interest surrounding Hyperliquid. Santiment identified newly launched HYPE linked ETFs from Bitwise and 21Shares in May as one of the major catalysts behind the recent move.
Bitwise Chief Investment Officer Matt Hougan recently praised Hyperliquid, describing it as one of the fastest growing financial businesses he has seen. He also argued that both the platform and its native token remain undervalued by the market.
Meanwhile, Bitwise CEO Hunter Horsley stated on May 21 that Hyperliquid and Solana are helping create a new category of blockchain networks he referred to as “revenue chains.”
According to Horsley, Hyperliquid has generated approximately $790 million in total blockchain revenue, surpassing Solana’s $532 million. Tron and Ethereum followed with roughly $471 million and $425 million in revenue respectively.
Before the latest breakout, HYPE had already climbed around 24% from its May 13 low near $38. Analysts attributed part of that earlier move to the passing of the CLARITY Act on May 14 and the launch of synthetic SpaceX perpetual contracts on the Hyperliquid connected platform Trade.xyz.#crypto#cryptonews https://coinsignals.net https://t.me/coinsignalpublic
