Executive Summary
The native cryptocurrency HYPE has exhibited a modest increase of less than 1%, currently trading at approximately $27 per unit. This uptick occurs against a backdrop of declining performance from other prominent cryptocurrencies, including Bitcoin, XRP, and Ether. Notably, the prospect of burning a significant portion of the assistance fund has emerged as a potential catalyst for HYPE to reclaim the psychologically significant $30 threshold.
Strategic Token Burn Proposal by Hyperliquid Foundation
The Hyperliquid platform, which operates as a decentralized exchange (DEX), has announced an initiative to permanently eliminate 37.11 million HYPE tokens from circulation. This reduction accounts for 3.71% of the total token supply and is aimed at enhancing the overall scarcity and value of HYPE.
This strategic move follows the Hyperliquid Foundation’s proposal to conduct a validator vote to formally recognize these tokens as burned, thereby removing them from both circulating and total supply metrics. The funds earmarked for this action have been accumulated through an automated mechanism within the Assistance Fund, which converts trading fees into HYPE tokens.
The Hyper Foundation is proposing a validator vote to formally recognize the Assistance Fund HYPE as burned, removing the tokens permanently from the circulating and total supply.
For context, the Assistance Fund converts trading fees to HYPE in a fully automated manner as part…
— Hyper Foundation (@HyperFND) December 17, 2025
The aforementioned tokens remain stored in an assistance fund address that lacks a private key, rendering them inaccessible without executing a hard fork. Current community voting on this matter could establish a social consensus against any future protocol upgrades aimed at accessing these funds.
Market Sentiment and Trading Data Analysis
Current derivatives data indicates a burgeoning bullish sentiment among traders regarding HYPE. According to CoinGlass metrics, Open Interest (OI) has increased by 1.63% over the past 24 hours, reaching $1.53 billion. This uptick reflects a growing notional value associated with active trading positions in HYPE.
Moreover, an increase in HYPE’s OI-weighted funding rate to 0.0839% further corroborates rising buying pressure among market participants, suggesting a potentially favorable outlook for investors.
Technical Analysis: Potential Price Movements for HYPE
The analysis of the HYPE/USD four-hour chart reveals a bearish trend following a decline of approximately 4% over the past week. Currently, HYPE trades above the critical support level of $26. However, this recent news regarding token burns has yet to be reflected in market pricing and could serve as an impetus for upward momentum in the coming days.
Failure to maintain above this support level may prompt a further decline towards an October low near $20. Currently, with an RSI reading of 40—indicative of bearish momentum fading—and MACD indicators continuing their downward trajectory, caution is warranted among market analysts.
Potential Scenarios for Future Price Movements
Conversely, should bullish momentum persist and facilitate a daily close above $26, there exists potential for HYPE to rally towards resistance at the $34 mark. This scenario hinges on continued positive sentiment and market dynamics supporting upward price movements.
