Hyperliquid HYPE gains 14% in August as smart money turns short

HYPE gained 13.99% in August, the strongest among the top 10 crypto assets, even as Nansen data shows whales and smart traders holding net short positions.

Hyperliquid's HYPE rose 13.99% in August to lead the top 10 crypto assets, while on-chain data shows whales and smart traders positioned net short.

Nansen data shows whales, smart traders, and public figures all net short on HYPE, with funding at 0.00125% per hour, near 10.95% annualized, meaning longs currently pay shorts.

The gain follows a 21.94% drawdown from HYPE's record high into early August. HYPE ETFs saw three consecutive weeks of outflows through July 31 before flows turned positive in the first two weeks of August; no new inflows have been recorded since August 10. On-chain trackers recorded mixed large-holder activity: a Maven11 Capital-linked wallet withdrew 202,705 HYPE from OKX, Monetalis-linked wallets bought 171,543 HYPE worth $9.56 million, and a fresh wallet accumulated 57,000 HYPE (~$3.36 million) from Coinbase. In parallel, one whale sold 923,743 HYPE worth $53.02 million, and HyperLabs unlocked 433,025 HYPE ($23.46 million), depositing tokens to Flowdesk and OKX.

The divergence between price momentum and derivatives positioning sets up either a short squeeze or a correction. Renewed ETF creations would signal institutional buyers returning, while a shift in the whale cohort to net long would confirm the same from derivatives. Neither has happened yet.

ETF Flows Stall After Three-Week Outflow Streak

SoSoValue data shows HYPE ETFs recorded three consecutive weeks of outflows through July 31. Flows turned positive in the first two weeks of August, but the recovery has stalled, with no new inflows recorded since August 10. Cumulative inflows since launch stand at roughly $280.8 million, against $15.16 million in outflows.

The stall matters because HYPE's price has historically tracked institutional demand. Bitwise recently accumulated 28,085.8 HYPE from Nonco for its ETF clients, supporting the accumulation narrative, but the broader flow picture remains mixed.

Whale Activity Splits Between Accumulation and Distribution

Large holders moved in both directions this month. A wallet linked to Maven11 Capital withdrew 202,705 HYPE from OKX last week. Monetalis-linked wallets sold 3.72 million Uniswap (UNI) via Cumberland and bought 171,543 HYPE, worth $9.56 million, over the weekend. A fresh wallet accumulated and withdrew 57,000 HYPE (~$3.36 million) from Coinbase.

Selling ran in parallel. One whale sold 923,743 HYPE worth $53.02 million last week. "HyperLabs unlocked another 433,025 HYPE ($23.46 million) and has been gradually depositing the tokens into exchanges, including Flowdesk and OKX, likely to sell," Lookonchain reported in early August.

Revenue Compression Weighs on Buyback Support

HYPE's tokenomics are tightly linked to protocol revenue, with around 97% of trading fees going to an Assistance Fund that buys HYPE on the open market and retires it. Protocol revenue has fallen for four consecutive quarters, dropping from around $357 million in Q3 2025 to about $202 million in Q2 2026, a decline of roughly 43%, even as trade counts and open interest reached records. HIP-3 allows builders who stake significant HYPE to keep a share of trading fees; builder-deployed markets have grown from around 2% of volume at the start of 2026 to about 50% recently. The Assistance Fund bought nearly $290 million of HYPE in Q3 2025 but roughly $149 million in Q2 2026, about half as much.

The contrast between HYPE's price leadership and smart money positioning could resolve in either direction. A short squeeze would push HYPE toward the $60 resistance level, while a breakdown below support near $51.20 would confirm the bearish thesis. The outcome hinges on whether protocol revenue recovers and whether ETF inflows resume.

This article is for informational purposes only and does not constitute investment advice.