Hyperliquid has just passed a significant milestone with a $644 million buyback program, as the HYPE token navigates a challenging consolidation phase. Derivatives market whales are heavily accumulating at discounted prices. Will this aggressive strategy reverse the downtrend and restore investor confidence?
The Hyperliquid protocol has intensified its HYPE token buyback program, now reaching the symbolic threshold of $644 million. This aggressive accumulation comes during a particularly volatile market period, where HYPE has undergone a significant correction since its all-time highs.
Token buybacks represent a well-established strategy in the crypto ecosystem to support asset valuation. By removing tokens from market supply, the development team mechanically creates buying pressure while reducing available supply. This approach resembles buybacks practiced by traditional companies, but with blockchain transparency that enables tracking of each transaction.
The scale of the program demonstrates the team’s confidence in the project’s long-term viability. Unlike artificial pumps, this strategy aims to stabilize the price while strengthening the protocol’s fundamentals. On-chain data reveals that these buybacks are executed regularly and progressively, avoiding counterproductive volatility spikes.
The central question remains: will these massive buybacks be sufficient to reverse the downward trend? Several factors come into play. On one hand, the reduction in circulating supply should mechanically exert upward pressure, especially if demand holds steady. On the other hand, the global macroeconomic context and general crypto market sentiment remain decisive factors.
Technical analysts identify several critical resistance levels that HYPE will need to break through to confirm a sustainable reversal. The $38-40 zone constitutes a major initial obstacle, while a return to $45 would require a more powerful catalyst than a simple buyback program.
Current holder behavior is also worth monitoring. If long-term holders continue maintaining their positions despite the volatility, this strengthens the bullish thesis. Conversely, a capitulation wave could extend the decline to $24 or even $16 in the coming months.
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The most interesting aspect of this dynamic lies in the behavior of major institutional investors. Trading data shows that several whales specializing in derivatives markets have initiated significant leveraged long positions on HYPE, taking advantage of current price levels considered attractive.
This coordinated accumulation suggests that major market players anticipate a bullish reversal. Open interest volumes on derivatives platforms have notably increased, signaling renewed interest in the token. Long/short ratios now lean in favor of buying positions, a technical signal often precursor to upward movements.
The timing of these entries is likely not coincidental. Whales typically identify robust support zones and moments when market sentiment reaches extreme pessimism. HYPE currently seems to check both boxes, offering a potentially favorable risk/reward ratio for informed investors.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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