HYPE prices face critical tests, and repurchase funds continue to expand

HYPE prices face key test as repo pool expands

On daily charts, HYPE's trading price is above the lower track of a rising wedge. Although prices peaked higher in September, momentum has waned.

Hyperliquid received its first USDC reserve income payment, which has not yet been used to purchase HYPE. It is said that Bloomberg Terminal now displays the price of Hyperliquid perpetual contracts, but does not provide transaction execution capabilities.

According to CoinMarketCap data, on Monday, October 5, HYPE traded at US$93.04, up 2.92% on the day, and a weekly increase of 3.36%, with a market value of US$23.31 billion. The token has risen about 92% since its low of $50.98 in early August and is now about 5% below its September 22 high of $97.90.

wedge range narrows from US$25 to less than US$10.

The daily chart shows that price increases are converging into a rising wedge as momentum recedes. Two major fundamental developments occurred in the same days: Hyperliquid received $14.58 million in USDC earmarked for token repurchases, and Bloomberg terminals began displaying market data from the exchange.

HYPE maintained a wedge of support around US$91, while the RSI indicator weakened. This round of rally was divided into three stages: HYPE climbed from US$50.98 to more than US$80 in the middle of mid-August; it then sideways for three weeks between US$80 and US$87; when it fell to about US$75 in mid-September, buying intervened at the 50th average price, and the rebound pushed the price higher to US$97.90 within a week.

Connecting the low and high points of this series, two rising lines that converge to each other appear, known as rising wedges. The lower track currently passes around $91, and the upper track passes around $100. The gap of about $9 exceeded $25 in August.

The latest pullback is crucial to pattern interpretation. HYPE fell to about $86 at the end of September and stopped falling at $86.83, which is the 0.236 Fibonacci retracement level for the entire rising band. Sellers recovered less than a quarter of their gains before buyers returned. Since then, prices have recorded higher closing prices in a row.

HYPE Price Map: Level above US$93 and Level below

• Upper Track: This pattern will be cancelled if it breaks through the top.
• $97.90: September 22 high, first resistance.
• $93.04: Current price.
• ~$91: Lower rail. A break below the daily close triggers a downward pattern.
• $86.83: Fibonacci 0.236, the stop of declines at the end of September.
• $83.04:50-day moving average, medium term uptrend line.
• $79.98: Fibonacci 0.382, support level in a deep correction.

The RSI broke through 80 in August, but was only 70 at a high of US$97.90

The RSI currently stands at 59.30. This reading suggests that buyers have a moderate advantage and that the market is not overheating. However, compared with the situation in August, the performance was not ideal. When HYPE approached US$85 in late August, the indicator exceeded 80, but a month later, when the price hit US$97.90, the indicator only reached about 70. Higher prices corresponding to lower RSI peaks constitute a bearish divergence: each new high requires less buying power than the previous one.

Trading volumes are also shrinking. The most active trading in this round of rally was concentrated around August 20, with daily volume trending downward since then, including during the push to September highs.

Generally, rising wedges accompanied by bearish divergences and shrinking trades tend to break downwards, although wedges also have the potential to break upwards. HYPE is still trading about 12% above its 50-day moving average ($83.04), a key boundary between a correction and a change in trend.

US$14.58 million used for repurchase is still idle in the system address.

On October 3, approximately US$14.58 million was transferred to Hyperliquid's system interest address. This is the first payment under the Aligned Quotation Assets v2 (AQAv2) framework, which sends approximately 90% of the cost-adjusted benefits earned by USDC reserves to the parties.

Circle is responsible for the technical side of the USDC on the network, while Coinbase manages the treasury side that generates revenue. The money was destined for the aid fund, which will purchase HYPE on the open market and send it to an address without a private key. As of October 5, the transfer has not yet taken place.

1. USDC reserves generate revenue: Completed
2. 14.58 million USDC payments to Hyperliquid: Completed (October 3)
3. Transfer to Aid Fund: Pending
4. Fund purchase and destruction HYPE: Not yet started

This scale is significant compared to existing plans. FinanceFeeds reported that fee-driven purchases totaled approximately $55.67 million in September, so the first reserve income payment was equivalent to approximately 26% of that amount. At $93, this would purchase approximately 157,000 HYPEs.

Two sources of HYPE repurchase funds

• $55.67M: Transaction fees, September
• $14.58M:USDC reserve income, first payment
• ~0.3%: Taken together, monthly percentage of market value

What matters for price is the nature of this demand. Fee-driven repo expands when trading is busy and contracts when trading is light, so it is weakest when tokens are under pressure. Reserve yields depend on the USDC balance and U.S. interest rates, so they can continue to be paid in depressed markets. The two add up to about $70 million per month, which constitutes a stable purchase price, but alone is not enough to maintain a certain chart price.

Bloomberg WSL HYPE screen displays prices but does not accept orders

According to a platform post, Bloomberg end users can now use the command "WSL HYPE" to monitor selected Hyperliquid markets. This data stream covers perpetual contracts (futures contracts with no expiration date) for cryptocurrencies, stocks, commodities, currencies and indices. The terminal does not provide transaction execution functions.

HYPE's connection is achieved through collateral. Trading desks that start trading on Hyperliquid need to deposit a USDC, and under the AQAv2 framework, this USDC can generate revenue for repurchase before any transaction is placed, and add fees once a transaction starts. Institutions still face custody, counterparty and compliance barriers that cannot be eliminated with a price screen.

A close below US$91 or above US$97.90 determines the next move

The wedge leaves little room. A break below US$91 on the day will put US$86.83 and the subsequent 50-day moving average of US$83.04 into the spotlight. A break above US$97.90 on the day will open a test for US$100 and weaken bearish interpretations of a divergence.

Supply is a hedging force for repo. About 238 million HYPEs, or 23.8% of the initial supply, are core contributors and will be unlocked on a monthly basis starting from the end of 2025, and the unlocking schedule will last until 2027-2028.

The Financial Times noted that token buybacks in the crypto space have an inconsistent impact on prices, although Matt Hougan, chief investment officer at Bitwise, told the newspaper that buybacks are one of the main drivers of HYPE's performance.

There are two outdated points in time worth tracking with the chart. The first was a $14.58 million USDC chain transfer to aid funds, marking the beginning of new buying orders. The second is the next reserve income payment: the current 30-day cycle ends around October 25, and the payment will expire in approximately eight days, in early November.