Hyperliquid [HYPE] has continued to use deflationary mechanisms to manage token supply and absorb market pressure. The protocol has primarily directed revenue toward token buybacks and burns as part of that approach.

Hyperliquid burns $1.2 million worth of HYPE

As HYPE continued to trade below $60, Hyperliquid again used protocol revenue to reduce inflationary pressure. Since August 2025, the Hyperliquid network has generated $800 million in net income, with HyperCore contributing 95% of that income.

A large share of the revenue generated by the network has been allocated to token buybacks. Of the $1.03 billion generated, $1.01 billion has been used for buybacks and burns.

Over the past day, Hyperliquid generated $1.4 million in fees and burned 20.64K HYPE, valued at $1.2 million. However, despite the latest buyback and burn activity, the amount of capital deployed for these measures has fallen sharply, declining 61%.

Following the recent burn, Hyperliquid has burned 4.73% of the token’s supply, according to Onchain Lens: https://x.com/OnchainLens/status/2081081790991933656?s=20. That figure also represents more than 15% of the currently circulating supply.

For holders and market participants, the significance of the buyback-and-burn model is that it connects protocol revenue to token supply reduction. However, burns alone do not confirm durable demand, which makes spot flows and momentum indicators important to track alongside supply changes.

The continued use of capital for deflationary measures has contributed to stabilizing the HYPE token. As a result, HYPE has remained resilient during an extended period of broader market weakness.

Is actual demand being incentivized?

The sustained deployment of capital to ease supply pressure has also played a role in supporting investor confidence. Buyers have continued to enter the market during pullbacks.

On the spot side, netflow has remained positive for two consecutive weeks. As of this writing, netflow stood at -$598,000, a significant change from -$3.2 million the previous day, reflecting strong buying pressure.

In exchange-flow analysis, negative netflow generally means more tokens are leaving exchanges than entering them. That can indicate reduced immediate sell-side liquidity, although it does not by itself establish a confirmed trend reversal.

Historically, sustained exchange outflows have preceded major price moves, particularly to the upside.

Momentum remains weak

Although demand currently remains firm, it has not yet been enough to turn the trend bullish. The RSI Momentum Trend indicator is positioned above the market price.

That setup usually indicates that sellers still have meaningful control of the market. In this context, the indicator is acting as dynamic resistance.

The Squeeze Momentum Indicator also remains below zero, at around -7.69, further confirming weakness in the trend. However, the price is still moving on an upward trajectory, and it would need to flip the RSI Momentum Trend to signal a reversal.

For that to happen, Hyperliquid would need a daily close above $60 to strengthen the uptrend. If it fails to do so, downside risk would increase, and HYPE could pull back toward $56 again.

Final summary

Hyperliquid generated $1.4 million in fees and burned 20.64K HYPE worth $1.2 million.

HYPE’s momentum remains weak despite recovering demand, but a daily close above $60 would signal a trend reversal.