HYPE, the native token of the Hyperliquid ecosystem, bounced more than 10% from its Sunday lows on Monday, recovering some ground after last week's sharp selloff. The rebound came as market watcher Citrini added Hyperliquid to its watchlist, pointing to the project's cash flow generation and buyback mechanisms as reasons for interest.
What drove the recovery
The token fell sharply last week amid broader crypto market weakness and profit-taking after a sustained rally. Sunday's low marked a trough before buyers stepped in. The 10%+ move brought HYPE back to levels not seen since mid-week, though it remains well below its all-time highs from earlier this month. Trading volumes spiked during the recovery, suggesting active accumulation rather than passive drift.
Why Citrini is watching
Citrini, a financial analytics platform that tracks high-conviction crypto assets, added Hyperliquid to its watchlist on Monday. The firm highlighted Hyperliquid's underlying cash flow—derived from fees on its perpetual futures exchange—and its token buyback program as compelling factors. Unlike many crypto projects that rely on inflation or venture capital, Hyperliquid uses part of its exchange revenue to repurchase and burn HYPE tokens, reducing supply over time. Citrini's inclusion typically signals that a project may be undervalued relative to its fundamentals, though the firm does not issue price targets.
What the buyback means
Buybacks are a rarity in crypto, where most projects still rely on new token emissions to fund operations. Hyperliquid's model effectively lets the exchange's profitability determine token supply dynamics. The more traders use the platform, the more fees are collected, and the more HYPE is bought back. That creates a direct link between usage and token scarcity—something equity investors are familiar with but crypto markets often lack. Critics note that buybacks can be paused at any time if trading volumes fall, making the mechanism less reliable during downturns.
Still below peak
Even with Monday's bounce, HYPE is trading roughly 40% below its record high from December. The token has been volatile since launch, and the selloff last week wiped out gains from the previous two weeks. Hyperliquid's exchange continues to see steady daily trading volumes, but the broader crypto market remains choppy. Bitcoin's recent slide below $95,000 has weighed on sentiment across altcoins, and HYPE is no exception.
Next on the calendar
Investors will watch whether the buyback program accelerates in the coming weeks. Hyperliquid's next scheduled token burn is set for February 1, when the project will publish its monthly fee report and execute the corresponding buyback. That data point will show whether cash flow held up during the selloff, and whether the team increased the buyback rate to support the price. No updates from Hyperliquid's development team have been issued since the recovery began.
