HYPE's Price Plunge: Whale Sell-Offs vs. Ecosystem Buyback Push

Renowned trader TechnoRevenant executed a significant sell-off of 377,000 HYPE tokens on September 22, 2025, valued at approximately $16.2 million at current prices Arthur Hayes Dumps HYPE Holdings^[3]. This transaction marked the second major liquidation by the trader, following the withdrawal of 2.39 million HYPE tokens from a primary wallet (0x316f…e678) earlier in the day, totaling $122 million in value HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. The tokens, acquired nine months ago at around $12 each, generated over $90 million in unrealized gains, highlighting the substantial appreciation of the token since its acquisition TechnoRevenant allegedly withdrew all 2.39 million HYPE tokens from the main wallet^[2]. The sale contributed to a 12% decline in HYPE’s price to $49.20, despite Hyperliquid maintaining daily trading volumes exceeding $10 billion HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1].

The sell-off occurred amid heightened market volatility, with prominent figures like Arthur Hayes and trader Ansem also exiting positions. Hayes, co-founder of BitMEX, sold 96,628 HYPE tokens for $5.1 million, securing a $823,000 profit Arthur Hayes Dumps HYPE Holdings^[3]. He attributed his decision to concerns over a scheduled token unlock event beginning November 29, which will release 237.8 million HYPE tokens into circulation, creating $500 million in monthly sell pressure over 24 months HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. Ansem added to the bearish sentiment by liquidating 10,126 HYPE tokens worth $492,000 HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. The coordinated exits amplified fears of supply overhang, with Hayes’ analysis through the Maelstrom Fund emphasizing an imbalance between projected $85 million in monthly buybacks and $500 million in unlock pressure, resulting in a $410 million monthly overhang HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1].

Hyperliquid’s community and ecosystem stakeholders have defended the token’s fundamentals, rejecting proposals to burn 45% of the total supply. Advocates argue that existing deflationary mechanisms—spot trading fees, HyperEVM gas costs, and auction fees—provide organic burn activity tied to platform usage HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. Initiatives like Hyperunit and Hyperdrive have allocated $2.67 million and $4.5 million in fees respectively toward HYPE buybacks, while decentralized autonomous organizations (DAOs) such as Hyperion’s HYPD and HypeStrat’s SONN continue to bid for HYPE allocations, creating structured demand HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. Institutional adoption, including wallet integrations with Phantom and Rabby, further supports long-term price stability by staking HYPE for fee reductions HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1].

The market’s reaction to the sell-off underscores the challenges of balancing speculative activity with fundamental growth. While HYPE has surged over 660% since its launch, the token’s performance remains vulnerable to large holder activity. Analysts note that competitive threats from platforms like Lighter.xyz and the potential for leveraged trading—exemplified by Aster exchange’s 300x leverage offering—could exacerbate price swings HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1]. Despite these risks, Hyperliquid’s ecosystem continues to generate revenue, with annualized platform fees projected to rise from $1.2 billion to $255 billion by 2028 Arthur Hayes Dumps HYPE Holdings^[3].

Arthur Hayes’ bullish 126x price target for HYPE by 2028 remains a focal point, though his recent exit highlights the tension between long-term optimism and short-term market dynamics Arthur Hayes Dumps HYPE Holdings^[3]. The trader has maintained that the unlock event does not invalidate his forecast, citing potential growth in stablecoin markets and Hyperliquid’s expanding user base Arthur Hayes Dumps HYPE Holdings^[3]. However, critics argue that the current buyback mechanisms lack the capacity to offset the impending supply surge, particularly as developers with vested tokens face incentives to sell HYPE Whale Exit Sparks Concerns Over DeFi Market Stability^[1].

The cumulative impact of whale activity, token unlocks, and leveraged trading has created a complex landscape for HYPE. While decentralized buyback programs and institutional adoption offer natural support, the market remains exposed to volatility from large-scale liquidations. The coming months will test the resilience of Hyperliquid’s tokenomics as the ecosystem navigates the balance between supply management and sustained growth.