Hyperliquid price slips 21% from its peak, but a proposal to slash HYPE’s total supply by 45% could reset valuations and spark renewed institutional demand.
Summary
- Hyperliquid has retraced 21% from its all-time high.
- A new proposal seeks to cut HYPE’s total supply by 45% by burning 452 million tokens.
- The move aims to align valuation metrics with real circulating supply, potentially boosting investor confidence.
Hyperliquid traded at $47.73 at press time, slipping 3.4% over the past 24 hours as the market reacts to a governance proposal that could cut the token’s supply nearly in half. The token has retreated 21% from its all-time high of $59.30 set on Sept. 18, leaving it down 10% in the past week but still up 8.2% in the last month.
Despite the recent pullback, Hyperliquid’s (HYPE) trading activity is rising. Daily volume climbed to $897.1 million, a 25% increase from the previous day, while derivatives trading showed mixed signals. Futures volume rose 18.6% to $3.11 billion, but open interest slipped 1.5% to $2.28 billion.
Short-term caution is suggested by this combination, which often indicates that traders are closing positions rather than opening new ones.
A major proposal to cut HYPE supply
On Sept. 22, DBA investment firm co-founder Jon Charbonneau and researcher Hasu submitted a proposal that could reshape Hyperliquid’s tokenomics.
The plan calls for burning about 31 million HYPE held in the Assistance Fund and revoking authorization for roughly 421 million tokens in the Future Emissions & Community Rewards pool. Together, this would slash the authorized total supply by more than 45%, from 1 billion to about 550 million HYPE.
The move would also remove HYPE’s 1 billion hard cap, allowing future issuance only through governance-approved channels such as staking emissions or community rewards. Importantly, the circulating supply of around 45 million tokens would remain unchanged, meaning existing holders would not face dilution.
At current prices, the proposal would cut Hyperliquid’s fully diluted valuation from roughly $47 billion to $25 billion, addressing what the authors describe as “misleadingly high” supply metrics that discourage institutional investors.
Hyperliquid price technical analysis
On the daily chart, HYPE is consolidating after its September peak. Although the token is trading below its 10- and 30-day moving averages, which suggests short-term weakness, the longer trend is still intact as HYPE is still well above its 100-day ($39.12) and 200-day ($32.45) averages.
At 44.7, the relative strength index is close to oversold territory, indicating that there may not be much more downside. A lower FDV profile may turn into a bullish catalyst if the proposal is approved.
If HYPE defends support at $45, analysts anticipate that sentiment will improve. Short-term upside targets are $50–$52, and a potential retest of $59 if momentum picks up. But, if $45 is not held, the token may be vulnerable to further declines toward $41.
