HYPE Experiences Short Squeeze Amid Rising ETF Interest

HYPE has seen a significant short squeeze as traders betting on its decline faced rising prices, according to ChainCatcher. Santiment reported that funding rates on various platforms showed a notable negative surge, yet HYPE's price continued to climb, forcing bearish traders to cover their positions, further driving up the price. The total open interest for HYPE remains at a high level, exceeding $1.92 billion. Despite expectations that liquidations would collapse open interest, HYPE remains one of the most popular assets in the crypto market, attracting new traders and maintaining high open interest levels. The recent price surge is primarily driven by growing enthusiasm for Hyperliquid-related ETF products. In May 2026, companies like Bitwise and 21Shares launched ETFs linked to HYPE, providing traditional investors with exposure to the asset without needing a crypto wallet or decentralized exchange. Market analysts view these ETFs as a sign of Hyperliquid's transition from a niche DeFi platform to an institutionally recognized crypto ecosystem.