Hyperliquid’s deflationary mechanism is accelerating, with the protocol burning $1.28 million worth of HYPE in the past 24 hours after generating $1.65 million in fees. Lifetime token burns have now reached 47.53 million HYPE, equivalent to $2.68 billion, highlighting stronger long-term holding and fewer tokens changing hands. This combination points to a steadily tightening supply backdrop, which could translate into bullish signals in the long run. Despite the token extending a two-day correction, the burn rate is driven by revenue, meaning higher protocol activity continues removing HYPE from circulation.
The impact on the burned tokens is already visible on the market. Hyperliquid’s circulating turnover has fallen to a weekly average of 2.9%.
The sharp decline in circulating turnover suggests holders are keeping their positions instead of rotating supply back into the market. Reduced token availability has historically supported bullish trends when demand remains stable.
On the daily chart, the token’s Bollinger Bands have widened, indicating increased market volatility. However, the token is still trading below the key 20-day SMA, and its Stochastic RSI is currently at an overbought region, increasing the likelihood of a further short-term bearish run.
Token trading volume has flattened at around $230 million after a week of steady gains. This could be the result of many traders playing averse as they wait for a potential rejection at around $54 before they chip in to join the trend.
With the overall long-term structure still leaning bullish and the token supply reducing, the token could be on a short correction to clear a liquidity cluster worth over $1.53 million at $54.22. This price level lies within the market gap between $52 and $55 on the daily chart, a zone the token is likely to retest to collect unfilled orders before resuming its long-term bullish trend. If HYPE bulls defend the demand zone, a continuation of the bullish rally back to $60 will be likely to materialize.
