Hyperliquid's HYPE Token Unlock: Assessing Sell-Pressure Risks and Strategic Entry Points

The upcoming unlock of Hyperliquid's HYPE token on November 29, 2025, has ignited intense debate among investors and analysts. This event, which will release 9.92 million HYPE tokens (2.66% of the circulating supply) valued at approximately $314–$351 million, represents a critical juncture for the project's tokenomics and liquidity dynamics. While the team has emphasized long-term growth catalysts, the immediate sell-pressure risks and structural vulnerabilities in the token's distribution model demand rigorous scrutiny.

Tokenomics: Unlock Schedules and Structural Risks

Hyperliquid's token unlock follows a cliff vesting model, releasing all tokens at once rather than gradually. This approach contrasts sharply with linear vesting schedules, which mitigate liquidity shocks by spreading token availability over time. Data from Tokenomist indicates that the November 29 unlock marks the first major release since the token generation event (TGE) in November 2024, with subsequent unlocks planned over a 24-month period.

A key concern lies in the team's pre-unlock actions. Just 29 hours prior to the scheduled unlock, the Hyperliquid team unstaked 2.6 million HYPE tokens from staking pools, raising fears of liquidity manipulation. While the team has not officially confirmed the purpose of this move, it exacerbates market skepticism. Furthermore, the team still holds 240 million staked HYPE tokens ($8.36 billion), which could introduce prolonged sell-pressure risks as these tokens become available in future unlocks.

Core contributor tokens, locked for one year post-TGE, are expected to vest between 2027 and 2028. This delayed release provides some stability, but the immediate unlock of 9.92 million tokens-equivalent to 3.6% of the circulating supply in some reports-poses a significant overhang. Analysts like Arthur Hayes of BitMEX have highlighted that even if the team pledges not to sell, there is no enforceable mechanism to prevent dumping, leaving the market to absorb daily sell pressure.

Liquidity Risk Management: Buybacks and Staking Mechanisms
Hyperliquid's liquidity risk management strategies have been tested in recent months. The platform's automated buyback program, which allocates 90% of fee revenue to HYPE repurchases, has absorbed $600 million in tokens this year. However, this effort is dwarfed by the $314–$351 million unlock, with buybacks currently absorbing only 17% of the monthly token supply. The Assistance Fund, holding 31.61 million HYPE tokens ($1.4 billion), aims to offset sell pressure but faces challenges in sustaining price stability amid large-scale unlocks.

Recent upgrades, such as the HIP-3 Growth Mode, have reduced taker fees to as low as 0.0045%–0.009%, incentivizing liquidity providers and traders. Additionally, the Hyperliquid Strategies initiative-a $300 million HYPE treasury plan-aims to lock liquidity and align governance incentives. These measures could enhance long-term resilience, but their effectiveness remains untested in the face of immediate sell-pressure events.

Structural vulnerabilities persist, however. The platform's reliance on algorithmic market makers, rather than traditional liquidity providers, introduces risks during market stress. For instance, a coordinated manipulation event in the POPCAT market in November 2025 led to a $4.9 million drawdown, prompting temporary withdrawal pauses. While Hyperliquid's on-chain order book and HyperBFT consensus mechanism provide transparency, they also expose the platform to liquidity spirals during extreme volatility as reported by MEXC.

Strategic Entry Points: Balancing Short-Term Risks and Long-Term Catalysts
From a technical perspective, HYPE has declined 46% from its peak of $59.30 to $31 as of November 2025, trading within a descending channel. A close below the $33–$35 support level could push the price toward $28–$30, with further downside risks if the unlock overwhelms buybacks as noted by Whale Alert. However, long-term catalysts-such as the HIP-3 upgrade, HyperEVM integration, and institutional adoption via Hyperliquid Strategies-offer potential for price resilience.

Strategic entry points for investors must weigh these dynamics. For risk-tolerant participants, dips near $28–$30 could present opportunities if the Assistance Fund and buyback program stabilize the price. Conversely, those prioritizing safety may prefer to wait for post-unlock clarity, particularly if the team demonstrates disciplined token management.

Conclusion

Hyperliquid's HYPE token unlock represents a pivotal moment for its tokenomics and liquidity strategy. While the cliff vesting model and pre-unlock unstaking actions heighten short-term sell-pressure risks, the platform's long-term vision-including expanded trading markets and institutional partnerships-could mitigate these challenges. Investors must remain vigilant, balancing immediate volatility with the potential for sustained growth.