‘Conviction’ test ahead – Can Hyperliquid survive a 7.8M HYPE unlock?

The timing of token unlocks plays a crucial role in shaping how the setup unfolds. Notably, when tokens are already showing signs of technical exhaustion, any fresh supply entering the market can accelerate a deeper correction. Hyperliquid appears to exemplify this dynamic, following a sharp 37% weekly rally that pushed the token to a $64 all-time high.  With the Relative Strength Index (RSI) already in overbought territory, the market is now anticipating the release of 7.88 million HYPE tokens this week. This represents nearly $500 million in potential selling pressure, which could act as a trigger for a pullback and place HYPE at a key inflection point. According to AMBCrypto, this is where timing starts to become critical. From a technical standpoint, despite signs of overextension, HYPE continues to push higher, already up nearly 2% this week as it approaches the $64 resistance level. However, the market remains split on whether a sharp correction could follow, as upcoming token unlocks may intensify profit-taking, with the added supply potentially deepening any pullback. That said, the technical picture alone doesn’t tell the full story. On-chain signals also come into play. To assess whether this move is strategic or not, it’s important to examine how investors are positioning ahead of the 7.66 million Hyperliquid [HYPE] token unlock. HYPE unlock puts rally to the test as spot demand holds firm  The “hype” around Hyperliquid isn’t simply driven by short-term capital rotation. From a technical standpoint, the HYPE/BTC ratio posted a sharp 20%+ single-day jump on the 20th of May, which initially appeared to be a standard rotational move as the broader market leaned into a risk-off environment. However, on-chain data tells a different story. As shown in the chart below, HYPE perpetual funding on Hyperliquid sat at just 0.006%, while spot volume surged to $209 million over the past 24 hours. This implies a perp-to-spot ratio of 5.1x. Rather than leverage-driven speculation chasing price, this suggests genuine spot capital rotation. Meanwhile, whale accumulation continues to accelerate. With $1.16 billion in buybacks already in motion and a whale recently deploying $15.1 million to acquire 238k HYPE at $63.24, analysts argue that HYPE’s “flippening” resistance narrative is shifting from speculation to real positioning. In this context, the upcoming 7.8 million HYPE unlock appears “strategically” timed. As a result, a sharp supply shock could act as a catalyst for HYPE to break into new all-time highs.  Final Summary HYPE faces a $500 million token unlock, but strong spot buying and whale accumulation are still supporting price action despite overbought signals. Buybacks and large whale inflows suggest the unlock could act as a liquidity event, potentially fueling a move to new highs instead of a sharp correction.