Hyperliquid (HYPE) Token Unlock: Assessing Selling Pressure and Future Stability

The recent token unlock event for Hyperliquid (HYPE) on November 29, 2025, has reignited debates about the project's market resilience and the efficacy of its institutional buyback strategy. With 9.92 million HYPE tokens-valued between $308 million and $351 million-released into circulation according to KuCoin, the market faces a significant supply shock. This unlock, representing 2.66% of the circulating supply, was part of a 24-month vesting schedule for core contributors as reported by Phemex, but its timing and magnitude have raised concerns about potential sell pressure overwhelming buyback efforts.

The Scale of Selling Pressure

The unlock event included two distinct tranches: a larger 9.92 million token release for core contributors and a smaller 1.75 million token unlock for developers and core contributors, valued at over $60.4 million. While vesting schedules are standard in tokenomics, the sheer size of these unlocks-particularly the $351 million tranche-poses a unique challenge. According to Whale Alert, this one-time cliff unlock could "overwhelm" Hyperliquid's existing buyback program, which has spent $600 million in 2025 to repurchase tokens.

The market's reaction has already shown signs of fragility. In the weeks leading up to the unlock, spot and futures trading volumes declined by ~36% and ~30%, respectively, while open interest eased by ~5%. These metrics suggest a cautious investor sentiment, with liquidity providers and traders bracing for volatility. Technically, HYPE is trading in a descending channel, with critical support levels at $33–$35. A break below this range could push the price toward $28–$30, a level historically associated with prior recoveries.

Institutional Buybacks: A Double-Edged Sword

Hyperliquid's Assistance Fund has been a cornerstone of its market stability strategy, conducting daily buybacks of $2–$5 million. However, these efforts may prove insufficient against the influx of newly unlocked tokens. As stated by analysts at Phemex, the $351 million unlock represents a "supply overhang" that could outpace buyback absorption, particularly if sellers prioritize liquidity over long-term value retention.

The effectiveness of buybacks is further complicated by broader market dynamics. While Hyperliquid's HIP-3 upgrade-enabling permissionless market creation-has expanded trading activity and protocol revenue according to CoinMarketCap, the platform's ability to convert these gains into sustained buyback funding remains untested. Institutional liquidity providers, meanwhile, have shown mixed signals. On-chain data from MEXC indicates a surge in retail accumulation, with net inflows favoring self-custody wallets, but institutional order-book strength remains uneven.

Path to Recovery: Technical and Fundamental Catalysts

Despite short-term risks, several factors could bolster HYPE's post-unlock recovery. First, the $28–$30 price level has historically acted as a breakout point during prior corrections, suggesting a potential floor for retail and institutional buyers. Second, Hyperliquid's long-term catalysts-such as the launch of Hyperliquid Strategies, a $1 billion HYPE accumulation treasury-could offset selling pressure by creating new demand channels according to Investing.com.

Technically, a strong absorption of the descending channel's lower bounds would require coordinated buying pressure from both retail and institutional participants. As noted by CoinPedia, this scenario hinges on the market's ability to "absorb unlocked supply without a significant price drop." If successful, HYPE could retest the $35–$40 range, reinvigorating bullish sentiment.

Conclusion: Balancing Risks and Opportunities

The November 29 unlock represents a pivotal test for Hyperliquid's market resilience. While the immediate risk of a $28–$30 price correction is real, the project's buyback program, technical structure, and long-term initiatives provide a plausible path to recovery. Investors must closely monitor liquidity metrics, on-chain accumulation trends, and the execution of Hyperliquid Strategies. For now, the market remains in a delicate equilibrium-where the success of buybacks and institutional confidence will determine whether this unlock becomes a catalyst for growth or a prolonged bearish phase.