Hyperliquid's HYPE token traded near $76.50 on October 26 as traders monitored a thinning derivatives market for signs of a short squeeze — a move in which rising prices force short sellers to buy back tokens to close positions, compounding the rally. Data from CoinStats put open interest at roughly $3.09 billion, a 10.92% decline over 30 days. For price analysis, that decline establishes only that exposure has been reduced — it does not identify which side of the market exited.

Open Interest Falls 10.92% Without a Confirmed Squeeze

At 09:56 UTC, HypeBasis placed HYPE at $77.08, with $1.61 billion in open interest on Hyperliquid's perpetual market. The price had gained 1.77% over the previous 24 hours, while contract-denominated open interest fell 1.21% over the same period.

That gap points to traders reducing positions as prices recovered. It does not, however, establish whether short sellers were rushing to exit. The distinction matters because every new futures contract involves both a buyer and a seller: when existing contracts are closed, open interest falls, but the data do not reveal which side initiated the closures. As a result, a falling open-interest line on its own cannot confirm a squeeze is underway — only that leverage is leaving the market.

For HYPE, the price recovery and shrinking open interest leave a key question unanswered: whether traders are simply unwinding leverage, or whether short covering is beginning to influence the market.

Funding, Liquidations, and Order Flow Show Limited Squeeze Pressure

CoinStats reported a positive funding rate of 0.0037% every eight hours, with approximately 65% of Binance trading accounts holding long positions. Funding rates are the periodic payments exchanged between perpetual futures traders to keep contract prices tethered to spot; under positive readings, longs pay shorts, so sustained positive funding adds a running cost to long positions. Its liquidation snapshot showed $96,920 in forced closures, of which longs accounted for 72.1%. That imbalance places recent liquidation pressure on buyers rather than on short sellers.

Order flow offers a similar note of caution. Taker-buy shares reached 46.9% on Binance perpetuals and 48.9% on Bybit, indicating more aggressive selling than buying on both venues. These are derivatives figures, however, not spot cumulative volume delta (CVD). Spot CVD, a measure of net buying pressure in spot markets, would be needed to confirm directly whether spot buyers were absorbing the selling.

The chart adds a further detail: on October 24, Binance futures briefly touched $74.41, dipping below the $74.81 support reference before recovering. That move swept liquidity beneath support, but the rebound alone does not verify HYPE accumulation. Without confirmed spot CVD or an accelerating wave of short liquidations, the distinction between routine deleveraging and short covering remains unresolved.

Breakout Hinges on $77.28 as a 9.92M Token Unlock Nears

Hyperliquid's trading figures also carry a business backdrop. DefiLlama recorded $79.65 million in 30-day protocol fees and $63.49 million in revenue for Hyperliquid, the decentralized trading venue behind the perpetual market in focus — measures of activity rather than direct proof of HYPE purchases. Meanwhile, a scheduled unlock on November 6, 11 days after this data snapshot, will release 9.92 million tokens from lockup into circulating supply, a supply event traders are tracking alongside the technical levels.

Against that backdrop, $77.28 stands as the first resistance level. A sustained reclaim would put $79.17 in view, with $81.44 beyond it if spot buying strengthens and short liquidations accelerate. On the downside, $74.81 remains the support marker; losing it would shift attention to $72.28 and then $68.81, the downside levels identified for this setup.

Market Scenarios

• Bullish case: A sustained move above $77.28, followed by $79.17, could expose $81.44, provided spot buying strengthens.
• Bearish case: A loss of $74.81 would put $72.28 in focus, followed by $68.81 as the next downside reference.

Source: CoinEdition