What is the reason for the surge in Hyperliquid (HYPE) price?

▲ Hyperliquid (HYPE)/ChatGPT generated image ©

Hyperliquid (HYPE) surged by over 18% in a single day, buoyed by the launch of a spot ETF. While major cryptocurrencies are facing pressure from capital outflows, HYPE stands out as a rare asset attracting new institutional funds.

According to CoinMarketCap, a cryptocurrency market data aggregator, on May 15 (local time), Hyperliquid recorded a 24-hour increase of 18.60%, reaching $46.19. This represents an overwhelmingly bullish trend, considering the overall cryptocurrency market's rise of only about 1.55% during the same period. The market analyzes that the Hyperliquid spot ETF launched by 21Shares on May 12 acted as a key catalyst for this surge.

The media reported that the ETF recorded a total net inflow of $2.52 million during its first two days after launch, serving as a new channel for institutional buying. Unlike the recent trend of capital outflows from major product categories such as Bitcoin spot ETFs, Hyperliquid is reportedly benefiting from improved supply and demand through its new spot ETF. The market is evaluating this as a 'case where institutional demand has directly led to price increases.'

Trading volume also surged. According to the media, HYPE's trading volume increased by 127% in a short period, but no separate ecosystem news or new partnership announcements have been confirmed. The market believes that this rally is primarily driven by ETF expectations and short-term speculative capital inflows. Consequently, there is an analysis that price volatility could increase if the ETF fund flow falters.

A key variable for the future is whether it breaks through $50. The market discusses the possibility of testing the psychological resistance level of $50 if the inflow of ETF funds continues. Conversely, if the $40 support level breaks, there is a possibility that the short-term overheated rally could quickly cool down, leading to a correction to the $35 range.

The media noted that the current HYPE trend is strongly dependent on a single variable: the ETF. Specifically, while a bullish trend may continue if institutional capital inflows are sustained, the underlying logic for the rise could weaken if the net inflow to the ETF slows down or capital exits. The market expects the daily fund flow of the 21Shares Hyperliquid spot ETF to be a key indicator determining the price direction for the time being.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*