Hyperliquid Surges 5% After Bitwise HYPE ETF Launch Triggers Massive Short Squeeze

Despite a broader crypto market sell-off that pushed Bitcoin below $77,000, the HYPE token surged more than 5% on Monday, briefly reclaiming and surpassing its previous high near $47.

HYPE Rebounds Amid Crypto Market Weakness

Just days earlier, HYPE had fallen nearly 10% following reports that competitors ICE and CME urged US regulators to investigate Hyperliquid more closely.

However, on Monday the token rebounded sharply, gaining more than 5% while Bitcoin fell below the $77,000 level for the first time in over two weeks.

Market data showed that around midnight HYPE not only revisited its May 15 high just below $47, but briefly moved above that threshold.

Although the token later pulled back to $45.50 by 5:11 a.m. EDT, its market capitalization climbed to $10.85 billion — nearly $1 billion higher than the $9.9 billion recorded on May 16.

Short Squeeze Liquidates $7.1 Million in Leveraged Positions

The rally triggered a significant wave of leveraged liquidations across derivatives markets.

According to Coinglass:
— approximately 2,279 HYPE traders were liquidated;
— total liquidations reached $7.1 million;
— roughly 75% of those liquidations came from short positions.

The single largest HYPE liquidation totaled $877,299.

Bitwise ETF Seen as Main Catalyst Behind Recovery

Analysts believe the launch of Bitwise’s ETF played a major role in HYPE’s rebound.

On May 15, BHYP officially began trading on NYSE Arca as the first spot ETF tied to HYPE and the first to feature integrated native staking.

The ETF generated $4.31 million in trading volume on its debut day, marking the strongest first-day performance for a spot altcoin ETF launched in the United States in 2026.

Unlike many competing products that rely on third-party providers, Bitwise manages the staking process internally through its Bitwise Onchain Solutions division.

This structure allows the fund to collect staking rewards, which are then added directly to the ETF’s net asset value.

HYPE Outperforms While Altcoins Decline

HYPE’s rally occurred while most major altcoins moved sharply lower.

Among the worst performers:
— Bitcoin Cash (BCH) dropped 12%;
— Dogecoin (DOGE) fell nearly 6% to $0.104.

Most other large-cap altcoins posted losses ranging from 2% to 4%.

As a result, the combined altcoin market capitalization fell close to the $1 trillion mark.

Overall, the broader crypto sell-off reduced total market capitalization from nearly $2.7 trillion to approximately $2.65 trillion.