Hyperliquid's Token Unlock and Market Stability: Is HYPE Approaching a Critical Inflection Point?

The crypto market is no stranger to volatility, but the upcoming token unlock for Hyperliquid's $HYPE token has sparked intense debate. With 9.92 million tokens-valued between $308 million and $318 million-set to unlock on November 29, 2025, the event represents a pivotal moment for the project and its ecosystem. This analysis examines the interplay between token supply dynamics, market sentiment, and price resilience to determine whether HYPE is approaching a critical inflection point.

The Unlock: A Double-Edged Sword

Hyperliquid's unlock is part of a 24-month vesting schedule for core contributors, marking the first major release since its Token Generation Event in late 2024 according to KuCoin. While the sheer scale of the unlock-2.66% of the circulating supply-raises concerns about selling pressure, the project's aggressive buyback program and on-chain behavior suggest a more nuanced picture.

According to a report by KuCoin, the unlocked tokens are primarily directed toward insiders and contributors, with critics warning of potential price crashes due to cliff unlocks. However, post-unlock on-chain data reveals that only 23% of the supply (approximately 609,000 tokens) was sold via OTC desks, while over 40% was re-staked or retained by contributors. Notably, the Hyperliquid team and Hyperlabs restaked 33% of the unlocked tokens, signaling a strong commitment to long-term value.

Buybacks as a Stabilizing Force

Hyperliquid's buyback program has been a cornerstone of its strategy to counteract short-term volatility. As of 2025, the platform has allocated over $644.64 million through its Assistance Fund to repurchase 21.36 million HYPE tokens, reducing the circulating supply by 2.1%. This effort has positioned Hyperliquid as the leading project in token buybacks, accounting for nearly half of all such activity in the crypto market this year.

The program's effectiveness is evident in November 2025, where monthly buybacks averaged $82 million-four times the estimated selling pressure from the unlock. By permanently retiring tokens, Hyperliquid not only mitigates supply shocks but also enhances token economics, reinforcing long-term value for holders. Furthermore, the HIP-3 upgrade has expanded revenue generation through new perpetual markets, fueling the Assistance Fund and sustaining buybacks.

Market Sentiment and Technical Indicators

Despite these mitigating factors, the broader market environment remains bearish. HYPE's current price of $33.80 is 46% below its peak, and technical indicators suggest a descending channel. A break below the $33–$35 range could trigger a drop toward $28–$30, compounding risks from the unlock.

Community sentiment is mixed. While some praise the buyback program and re-staking behavior, others criticize the lack of transparency in Hyperliquid's token distribution model. Whale accumulation near key support levels, however, hints at growing interest in HYPE at current prices. This duality-between institutional caution and retail optimism-highlights the market's uncertainty.

The Path Forward: Inflection Point or Overhyped Event?

Hyperliquid's unlock is undeniably significant, but its impact hinges on three factors:
1. Continuity of Buybacks: Sustaining the $82 million monthly buyback pace will be critical to offsetting future unlocks.
2. On-Chain Behavior: The re-staking and retention of 70% of unlocked tokens suggest contributors view HYPE as a long-term asset.
3. Market Conditions: A broader crypto rally could amplify HYPE's resilience, while a prolonged bear market may exacerbate downside risks.

In the short term, the unlock appears to have been absorbed without a catastrophic sell-off, with HYPE's price dropping only 1.7% post-event. However, the token remains in a technically fragile position, and the $566 million weekly supply shock from other projects adds systemic risk.

Conclusion

Hyperliquid's token unlock is a test of its ecosystem's resilience. While the project has demonstrated robust buyback discipline and favorable on-chain behavior, the broader market's bearish sentiment and technical vulnerabilities cannot be ignored. For HYPE to avoid a critical inflection point, the team must maintain its buyback momentum, foster transparency, and navigate the volatile macro environment. Investors should monitor price action below $33 and the pace of whale accumulation as key signals of the token's trajectory.