Can HYPE find a breakthrough from the 37 million tokens burned? The target of $40 is still possible.

Market Dilemma and Key Interventions

Hyperliquid(HYPE) has recently faced downward pressure, retracing from a high of $50 two months ago to a recent local low of $22. Currently, HYPE is trading at $24.98, up 2.34% in the past 24 hours, but the weekly chart still shows a decline of 5.04%, indicating a clear lack of bullish momentum. In this challenging environment, the Hyper Foundation has decided to alleviate market pressure through an aggressive token burn mechanism.

37 Million HYPE Burned: Inflation Reduced by 11-13%

According to on-chain data, the Hyper Foundation, supported by community voting (weighted voting approval rate of 85%), has implemented a permanent burn of 37 million HYPE tokens, worth over $912 million. These burned tokens come from the Foundation’s Assistance Fund wallet address, where the accumulated token amount has increased significantly since December—from 9.3 million to 37.5 million.

During this process, the Foundation has adopted a continuous market acquisition strategy, investing an average of approximately $1.5 million daily to accumulate tokens. Just last week, it spent $12.4 million to purchase 498,340 HYPE. After burning these 37 million tokens, HYPE’s circulating supply has been officially reduced by 11-13%, significantly increasing scarcity from a tokenomics perspective.

On-Chain Activity Reveals Key Signals

Despite weak price performance, exchange net outflow data presents a positive signal. In recent days, outflows from exchanges have consistently exceeded inflows, with current net outflows reaching $5.1 million. This phenomenon typically indicates that market participants are accumulating rather than selling, suggesting an increased willingness for long-term holding.

Looking at trading activity, HYPE’s spot market engagement has begun to turn around. Buying pressure has, for the first time in over two weeks, surpassed selling pressure, with the average buy momentum index reaching 17, while the sell momentum index has dropped to -9. This contrast indicates that market sentiment is shifting from panic to cautious optimism.

Rebound Potential and Price Targets

The introduction of the burn mechanism has changed the short-term momentum of the market. Supported by expectations of reduced token supply and ongoing on-chain capital inflows, HYPE is poised to retest the key resistance level of $30. If this upward trend continues, further challenges to a target price of $40 are also possible.

However, caution remains essential. If this deflationary measure fails to effectively stimulate genuine demand, HYPE could break below the $20 support level, potentially dropping to $19. The key factor will be whether spot market buying interest is sufficient to sustain the rebound momentum.