Analysis: HYPE Breaks $50 for the First Time in Eight Months, Triggered by Short Squeeze and ETF Inflows

BlockBeats News, May 21st, Santiment posted on social media today, stating that in the past few days, a large number of traders were betting on a HYPE price drop. This caused a significant surge in funding rates on various trading platforms into negative territory. However, the price of HYPE has continued to rise, leading to a classic short squeeze scenario, where bearish traders were forced to cover their positions, further driving up the price.

Currently, the total open interest of HYPE futures contracts remains at an extremely high level of over $19.2 billion. Despite market expectations of a potential contract cascade due to liquidations, the high demand for HYPE, being one of the hottest assets in the crypto market, has attracted new traders to enter the market, keeping the open interest elevated.

The main catalyst for this recent surge has been the market's enthusiasm for Hyperliquid-related ETF products. In May 2026, companies like Bitwise and 21Shares launched ETFs pegged to HYPE, providing traditional investors with a channel to gain exposure to the asset without directly using a crypto wallet or decentralized exchange. Market analysts believe that the introduction of these ETFs signifies Hyperliquid's transition from a niche DeFi platform to an institutionally recognized part of the crypto ecosystem.