Hyperliquid Shows Signs of Leverage Overheating—Is a Short-Term Flush Needed Before it Targets $100?

Hyperliquid has continued to expand considerably, reaching new highs at $62.14 during the previous trading day. The trading volume also doubled to $1.58 billion, signifying the rise in the traders’ participation. At the same time, the speculative activity across the derivative market has accelerated rapidly, which has pushed the Open Interest to new highs. 

Despite the strong bullish momentum, signs of short-term overheating are beginning to emerge. The rise in the selling pressure, elevated leverage exposure, and euphoric funding conditions now suggest the rally may be entering a vulnerable phase. The key question now is whether the HYPE price rally has exhausted or is just undergoing a small correction before a rally to $100.

Hyperliquid Future Data Suggests Leverage Overheating

The latest Coinglass data shows Hyperliquid’s Open Interest has surged sharply above $2.7 billion while the HYPE price climbed toward the $60 range. The simultaneous rise in both price and Open Interest suggests fresh capital continues to enter the market as traders aggressively open new positions.

Rising Open Interest alongside rising price action is considered bullish because it reflects growing market participation rather than a temporary short squeeze. Besides, the OI-weighted funding rate strengthens the overheating narrative. Funding rates have recently spiked aggressively positive as HYPE approached fresh highs, indicating long traders are paying elevated premiums to maintain bullish positions.

When funding becomes excessively positive, it often reflects overcrowded long positions and rising speculative euphoria. While the aggressive funding spikes precede periods of high volatility, sharp pullbacks or temporary liquidation, the current structure does not confirm a macro bearish reversal. Instead, the market appears to be entering a late-stage momentum expansion phase where bullish sentiment remains dominant but increasingly unstable. 

Expanding Supply Continues to Be Absorbed by Strong Demand

Despite the growing leverage concerns, Hyperliquid’s broader structural outlook continues to remain strong. Glassnode data shows HYPE’s circulating supply valuation has continued rising alongside price action, suggesting the market is still absorbing the expanding token supply relatively efficiently. In many cases, aggressive supply expansion creates strong dilution pressure that weakens price performance.

However, Hyperliquid price continues to maintain upward momentum even as circulating valuation expands, indicating that underlying demand remains strong enough to offset the increasing supply. This divergence suggests the broader market still maintains confidence in the Hyperliquid ecosystem and its long-term growth trajectory.

The data also indicates the current rally is not being driven purely by speculative leverage alone. Spot demand and broader ecosystem participation continue to support the macro bullish structure despite signs of short-term overheating.

What’s Next for HYPE Price?

Hyperliquid currently appears to be entering a critical phase where bullish momentum remains intact, but leverage conditions are becoming increasingly stretched. If HYPE manages to stabilize above the $55 region and reclaim the $60 resistance zone with sustained buying volume, the broader bullish continuation could target higher levels around $75 and $85 before eventually approaching the psychological $100 milestone.

However, if the leverage-heavy structure begins unwinding aggressively, the token could witness a rapid short-term correction toward support zones around $52, $48, or even the lower $40 range. Still, these downside levels may act more as leverage reset zones rather than confirmed macro reversal regions as long as broader spot demand remains strong.