Hyperliquid’s HIP-3 permissionless futures market hit a record $1.34 billion in open interest.
HYPE has surged 48% since the US-Israel strikes on Iran began on February 26, outperforming Bitcoin and Ethereum.
Despite the rally, HYPE’s funding rate hit a year-to-date low of -0.022% on March 11, signalling heavy short positioning in the futures market that could either trigger a squeeze toward $43.83 or drag price back below $35.
HYPE is eyeing its highest price level in five months as activity on decentralized exchange Hyperliquid reaches a new milestone.
The open interest in Hyperliquid’s permissionless HIP-3 perpetual futures market, which allows traders to create tokenized futures contracts for any asset, has reached an all-time high.
This is driven by a surge in demand for oil and equity-linked contracts amid ongoing tensions in the Middle East, which are dampening sentiment across financial markets worldwide.
The spike in Hyperliquid’s activity is feeding directly into HYPE’s price action. The native token has gained nearly 7% over the past 24 hours, leading the market as the top gainer.
With rising trading volume and bullish technical indicators, the altcoin appears poised to reach a five-month high.
Middle East Tensions Send Traders to Hyperliquid
As previously reported, Hyperliquid recorded a significant surge in trading activity following the opening weekend of the US-Israel joint military operation against Iran.
Global commodity markets were closed when the first strikes were carried out, leaving capital with nowhere to go.
Rather than sitting idle, market participants moved toward Hyperliquid, sending capital into tokenized versions of oil and equity contracts on the DEX.
With commodity markets still volatile, demand for oil-based contracts, among others on the DEX, has pushed the total open interest on HIP-3 perpetual futures to an all-time high of $1.34 billion.
The protocol’s native token, HYPE, has benefited from this surge in user activity on the DEX. Trading at $36.89 at press time, HYPE has climbed 48% since the first US-Israel strikes on Iran on February 26.
This stands in sharp contrast to the broader market, where leading assets like Bitcoin and Ethereum have spent the same period trending sideways.
On the daily chart, HYPE trades significantly above its Super Trend Indicator, which now forms strong support below at $29.41.
This momentum indicator helps traders identify the market’s direction by placing a line above or below the price chart, depending on the asset’s volatility.
As with HYPE, when an asset’s price trades above the green line of the Super Trend indicator, it signals a bullish trend. It indicates the market is in an uptrend and that buying pressure is dominant.
Moreover, the setup of HYPE’s Aroon Indicator confirms that buy-side pressure. At press time, HYPE’s Aroon Up Line rests at 100%.
The Aroon indicator measures the strength and direction of a trend by analyzing the time since an asset’s recent highs (Aroon Up) and lows (Aroon Down).
When an asset’s Aroon Up line is at 100% like this, it signals a high volume of accumulation among spot traders. It also indicates that the asset has newly hit its most recent high.
This is true of HYPE, which currently trades near a price high last observed 37 days ago.
Shorts Are Piling Into HYPE Even as Spot Prices Surge — What Happens Next?
However, not everyone wants the rally to continue. Despite HYPE’s sharp price climb, the token’s funding rate has flipped negative in recent sessions, signalling the high demand for short positions.
As of March 11, HYPE’s funding rate closed at a year-to-date low of -0.022%, according to Coinglass.
The funding rate is a periodic payment between traders in perpetual futures contracts to keep the contract price aligned with the spot price. When the funding rate is positive, there is a higher demand for long positions.
On the other hand, negative funding rates signal that futures traders are actively betting against an upward price.
This divergence in trends between HYPE’s spot and futures traders sets up an interesting dynamic.
If buying pressure in the spot market persists, the buildup of short positions could trigger a squeeze, pushing HYPE’s price higher.
In this scenario, the token could break above its immediate resistance at $39.98. A close above this level could open the door to the psychological $40 mark and sustain a push toward $43.83, a high last reached in October.
On the other hand, if the funding rate remains negative and spot demand begins to fade, HYPE may shed recent gains and fall below $35.
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Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Abiodun Oladokun is a Research Analyst at CCN, where he covers cryptocurrency markets with a focus on on-chain analysis, technical assessments, and emerging trends across decentralized finance (DeFi), real-world assets (RWA), artificial intelligence (AI), decentralized physical infrastructure networks (DePIN), Layer 2s, and meme coins.
Prior to CCN, he served as a Senior On-Chain Analyst at BeInCrypto, producing market reports spanning diverse crypto sectors.
Before that, he conducted technical analysis and market assessments of various altcoins at AMBCrypto, where he also contributed long-form quarterly research papers on DeFi, NFTs, DAOs, and scaling architectures, leveraging on-chain platforms including Messari, Santiment, DefiLlama, and Dune Analytics.
He began his crypto career as a research analyst at SixthSense DAO, developing blockchain forensic tools to trace the history of stolen assets.
Abiodun is a lawyer called to the Nigerian Bar and the founder of Ilé Ijó, a Lagos-based electronic dance music collective.
