Burning 912 million dollars worth of HYPE: Is it enough to reach the $40 target?

Hyperliquid has faced significant market challenges. Since its peak near $60, the token has dropped dramatically and is currently valued at $24.40, representing a 7.5% weekly loss. Despite these difficulties, Hyper Foundation has decided to take decisive steps to support the ecosystem through an aggressive token buyback and burn program.

Massive Intervention: Burning 37 Million HYPE

In a groundbreaking move, Hyper Foundation’s management, supported by a weighted voting with 85% approval, approved the burning of 37 million HYPE tokens. This operation involves removing tokens worth over $912 million from circulation. These units were previously accumulated in Assistance Fund Addresses through a consistent buyback program initiated in December 2024.

The accumulation dynamics were impressive: the account balance increased from 9.3 million to 37.51 million HYPE in just a few weeks. The average daily buyback expenditure was about $1.5 million, with the team spending $12.4 million in the last seven days to acquire approximately 498,000 tokens.

Burning this large package ultimately reduced the circulating supply by an estimated 11-13%, fundamentally changing HYPE’s economic profile. The tokens were sent to an inaccessible address, formalizing their removal from the market.

On-Chain Signals Indicate a Trend Reversal

On-chain data indicate a significant change in dynamics. Net network flows from exchanges remain negative at -$5.1 million, meaning investors are consistently withdrawing their assets from trading platforms. Such behavior traditionally precedes price increases, as it reduces the available supply for sale.

At the same time, market sentiment dynamics were also analyzed. For the first time in over two weeks, buyers showed a significant advantage over sellers. The average bullish movement increased to 17, while bearish sentiment dropped to -9, indicating a clear shift toward optimism.

Price Outlook and Future Development Scenarios

Considering historical precedents of deflationary operations, the market appears to be exceptionally well-positioned for a potential rebound. If the buying momentum continues and selling pressure from legitimized sellers decreases, the token has a chance to recover to the $30 level, followed by a breakout toward the $40 target.

An alternative scenario suggests that if the burning of $912 million worth of tokens does not produce a lasting fundamental effect, HYPE could break support at $20 and decline further, testing the $19 level. Much will depend on whether market enthusiasm sustains over the coming days.