BlockBeats news, on May 21, Santiment posted on social media that over the past few days, a large number of traders bet on HYPE's decline, causing significant negative spikes in funding rates across various platforms. However, HYPE's price continued to rise, forming a classic short squeeze that forced bearish traders to automatically buy back their positions, further pushing the price higher.
Currently, the total open interest of HYPE remains at a very high level above $1.92 billion. Although the market generally expects liquidations to cause a collapse in open interest, HYPE, as one of the most popular assets in the current crypto market, continues to attract new traders, keeping open interest elevated.
The primary catalyst for this rally is growing market enthusiasm for ETF products linked to Hyperliquid. In May 2026, Bitwise, 21Shares, and others launched HYPE-linked ETFs, providing traditional investors with a way to gain exposure to the asset without needing to use cryptocurrency wallets or decentralized exchanges directly. Market analysts view the launch of these ETFs as a sign that Hyperliquid is transitioning from a niche DeFi platform to an institutionally recognized part of the cryptocurrency ecosystem.