Hyperliquid’s latest token burn removed 32.77K HYPE from supply as rising protocol activity continued to support the recurring buyback mechanism.

The protocol reportedly purchased and burned approximately 32.77K HYPE in a transaction valued at about $2.65 million. The average purchase price was $81.01 per token.

Cumulative burns have now reached 48.57 million HYPE, representing approximately $3.82 billion at the current price valuation. The amount removed accounts for about 4.86% of HYPE’s total token supply.

Hyperliquid’s mechanism converts protocol-generated revenue into permanent reductions in the HYPE supply. Each completed burn reduces the maximum circulating supply instead of temporarily locking tokens. However, the supply reduction alone does not guarantee an immediate price increase. Continued revenue generation remains important for maintaining the scale and frequency of future purchases.

Rising TVL supports Hyperliquid’s burn mechanism

Hyperliquid’s total value locked (TVL) had risen toward $7 billion at the time of writing, providing the financial backdrop for the latest HYPE burns.

TVL had previously remained around $6 billion before accelerating sharply during September. The increase brought the amount of locked capital close to its highest level.

Daily fees also continued to reach several million dollars, with occasional spikes substantially above normal levels. The combination of rising TVL and fee generation strengthened the basis for recurring HYPE purchases because protocol activity supplies the revenue used by the burn mechanism.

Sustained elevated activity could generate additional fees and support continued token removals. However, the mechanism depends on durable platform usage rather than TVL growth alone. A lasting combination of capital deployment and fee generation would therefore improve HYPE’s long-term supply dynamics.

Derivatives positioning shifts toward longs

Positioning in the derivatives market also changed after several sharp funding-rate fluctuations during September. HYPE’s open-interest-weighted funding rate briefly turned negative multiple times after September 8.

By September 12, however, the rate had returned to positive territory at approximately 0.0012%, according to CoinGlass data. The reversal indicated that long positions had regained a slight funding premium over short positions.

Current positioning remained well below the higher positive funding rates recorded during late August. As a result, the renewed long exposure had not yet reached similarly aggressive levels.

A sustained positive funding rate could support the demand outlook if leverage remains controlled. Conversely, another move below zero would indicate renewed pressure from short positions.

$78.50 support level comes into focus

HYPE’s price action presented the clearest near-term risk after the token failed to break through the $88.14 resistance zone. The rejection pushed Hyperliquid’s price below its rising channel before it stabilized near $78.65.

The $78.50 level has emerged as the immediate structural support that could determine whether the breakdown deepens. A confirmed move below that level could establish a Change of Character (CHoCH) in the price direction.

Technical indicators also pointed to a weakening structure. The MACD recorded a bearish crossover accompanied by a negative histogram, while the RSI cooled to 50.69 after previously reaching overbought territory during the recent advance.

The indicators supported the channel breakdown rather than contradicting it. At the same time, the RSI remained near neutral levels and had not entered oversold territory.

Defending $78.50 could allow the price to stabilize and reopen a recovery attempt toward the $88.14 supply zone. Losing that support would reinforce the bearish structural shift and expose the $70 region.

Source: https://cryptonews.net/news/analytics/33434619/

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