Hyperliquid’s HYPE token fell to around $58 earlier Wednesday as large staking withdrawals entered the queue, creating a sizable potential supply overhang for the market over the coming week. On-chain data compiled by Block Liquidity indicates a cluster of unstaking and withdrawal requests involving several major crypto funds.

According to Block Liquidity’s flow tracking, Multicoin Capital controls a combined $138.78 million worth of staked HYPE, with about 83%, or roughly $116 million, listed as pending withdrawal. Separately, Selini Capital and Galaxy Digital have queued withdrawals totaling $4.4 million and $29.4 million, respectively. Block Liquidity also flagged a Multicoin-linked wallet depositing approximately 167,000 HYPE, worth about $11.2 million, to Coinbase, suggesting that at least some tokens may be routed for potential sale or other handling.

Across the tracked queues, pending fund withdrawals total roughly $150 million in HYPE, a large figure relative to the token’s thinner spot market. Block Liquidity recorded $72.8 million in HYPE spot volume over approximately 28 hours, while Multicoin managing partner Tushar Jain said the HYPE being unstaked was not intended for selling. The destination of the liquidity after the July 28 unlock remains a key point of attention because HYPE can function both as a tradable asset and as staking collateral for Hyperliquid ecosystem activity.

Unstaking queues add near-term supply pressure

The immediate pressure on HYPE came from the scale of withdrawals initiated by market participants. Pending unlocks are expected to be processed over roughly five to seven days, effectively placing a large amount of newly available HYPE into the liquid ecosystem on a compressed timeline.

HYPE perpetuals volumes are substantially larger, reportedly around $400 million daily for perps, but the spot market is materially smaller. Block Liquidity recorded $72.8 million of HYPE spot volume across about 28 hours leading up to Wednesday morning, with 1,463 unique buyers and 982 sellers. Wintermute was the largest net buyer, at more than $9 million, while the largest net seller reduced exposure by about $5.2 million.

The imbalance between withdrawal queues that can approach $150 million and much lower daily spot turnover helps explain why traders reacted quickly when the unlocks became visible. Even if not all tokens are sold, markets often price in uncertainty around absorption capacity, particularly when spot liquidity is thin relative to possible new supply.

Sale or redeployment remains unclear

The central question for investors and traders is whether the withdrawals lead to market selling or whether the tokens are redeployed elsewhere within Hyperliquid’s ecosystem.

For Selini Capital, the unstaking appears connected to the shutdown of HIP-3 CASH perpetuals markets operating under the HIP-3 framework. The withdrawal activity is associated with Selini’s unstaking flow, including a Selini-linked address on Hyperevmscan. The broader context includes a DreamCash post on X saying that relevant markets struggled to maintain liquidity, particularly as USDC became more entrenched in Hyperliquid’s trading environment.

Under HIP-3 deployments, a builder-deployed perpetual requires staking 500,000 HYPE as a slashable security bond. That bond is intended to be refunded when a market becomes defunct, making the unlock closer to a release of collateral than a direct liquidity event. However, collateral can still be sold, potentially through OTC channels, depending on the fund’s strategy and risk posture.

As a result, the market’s near-term direction depends on what happens after the July 28 unlock and the subsequent processing window. At the time of reporting, HYPE had fallen about 11% over the previous week. Even after recovering modestly from the day’s lows, it had not returned to earlier highs.

Multicoin activity raises redeployment question

While Selini’s unlock is tied to the closure of a specific HIP-3 market, Multicoin’s pending withdrawal could represent either liquidation or reallocation into a new deployment. The distinction is material: redeployment into new perpetual markets can keep tokens within the ecosystem, while sales can pressure spot and potentially perpetual pricing if the selling is large enough.

Multicoin was also recently involved in a Hyperliquid-linked venture investment. Last week, the firm led a $1.75 million seed round into Trasia, described as an Asia-focused, non-custodial trading platform aiming to launch perpetuals for Asian equities. Jain said in an X post that Trasia is targeting “net new users” unfamiliar with Hyperliquid.

In a later Wednesday update on X, Jain also said the HYPE being unstaked was not intended for selling. The statement directly addressed the question traders are asking: whether the visible withdrawal queue becomes a selling event or collateral movement toward a new deployment.

Market participants are expected to watch the July 28 unlock closely to see where the assets move next. If HYPE is redeployed into new HIP-3 markets or other ecosystem uses, the immediate selling risk could fade. If the tokens move to venues in a way that suggests liquidation, the overhang could last beyond the processing window itself.

For now, HYPE’s near-term price action is closely tied to supply mechanics: how quickly pending withdrawals convert into spot selling versus redeployment. The main signal will be post-unlock routing, including whether tokens flow into new perpetual deployments or toward exchanges in the days around the July 28 release.