Hyperliquid (HYPE) made headlines in the past 24 hours, surging by 9.5% as its Total Value Locked (TVL) exceeded $1.0 billion for the first time. This surge in price and TVL signifies a strong bullish sentiment, attracting attention from investors. However, despite the impressive price increase, concerns are growing due to a cooling of Spot Volume. While the TVL continues to rise, the fading Spot Volume raises a key question: Is the rally running on real fuel or is it losing steam?

The Cooling of Spot Volume

Spot Volume is a key indicator of immediate market activity, showing the level of retail demand for a cryptocurrency. Typically, a sharp drop in Spot Volume after a price increase can signal that the rally is losing momentum, as it suggests reduced retail interest. For HYPE, recent data from CryptoQuant shows a decline in Spot Volume, signaling that immediate buying interest may be cooling down. This trend could mean that retail investors are losing enthusiasm, which often leads to a loss of momentum in the short term.

While the decline in Spot Volume is concerning, it doesn’t necessarily spell the end of the rally. HYPE’s other metrics still indicate underlying bullish strength, suggesting that the rally might still have legs. The decline in volume could be a short-term fluctuation rather than an indication of a larger reversal.

TVL Reaches New Heights

One of the most significant positive indicators for Hyperliquid is the increase in its TVL. In the past 24 hours, the platform’s TVL grew by over 4%, reaching a new high of $1.073 billion, according to data from DefiLlama. TVL is a critical metric in decentralized finance (DeFi), as it represents the total value of assets locked into the platform through activities such as staking, lending, and liquidity provision.

An increasing TVL generally reflects growing investor confidence, as capital is flowing into the platform. The rise in HYPE’s TVL suggests that, despite the cooling Spot Volume, investors are still confident in the token’s long-term potential. This growing TVL is a strong bullish signal, as it implies that capital is still being injected into the network, which could support further price increases.

In addition to rising TVL, the Long/Short Ratio for HYPE remains heavily skewed toward long positions. This ratio is important because it shows the sentiment of traders—whether they expect the price to rise or fall. A heavy tilt toward long positions suggests that most traders are positioning for more upside. When combined with rising TVL, this ratio strengthens the case for a continued bullish trend.

Technical Indicators Suggest Sustained Momentum

Technically, HYPE remains in a strong bullish channel. Since its reversal in early April, the altcoin has been consistently printing higher lows and higher highs—classic indicators of an uptrend. The recent 9.5% surge fits into this broader trend, confirming that HYPE’s price action is part of a sustained bullish rally, rather than a temporary spike.

If HYPE continues to follow its current trajectory, it could soon test higher resistance levels. The sustained bullish momentum seen in its daily chart suggests that the recent price jump is not an isolated event but part of a broader trend that could continue in the short term.

Despite the cooling Spot Volume, the rising TVL and the long-heavy Long/Short Ratio indicate that there’s still substantial interest in HYPE. As long as these factors hold steady, there’s a strong likelihood that the rally could continue and test new highs.

Potential for Short-Term Volatility

While the overall trend for HYPE looks positive, short-term volatility cannot be ruled out. The market for altcoins is often subject to rapid fluctuations, and the decrease in Spot Volume suggests that the rally may face turbulence in the near term. If retail demand continues to weaken, HYPE could experience price corrections. Additionally, external market factors, such as broader market sentiment or macroeconomic developments, could influence HYPE’s price in the short run.

However, if the decline in Spot Volume is merely temporary, and if institutional and long-term investors continue to show confidence, the bullish trend could persist. The key will be whether the platform can continue to attract capital and maintain the current growth in TVL, which would support the price rally and provide a solid foundation for further gains.

Conclusion: Is the Rally Sustainable?

HYPE’s recent 9.5% surge and its rising TVL are positive signs for the token’s long-term prospects. However, the cooling Spot Volume does raise some concerns about the sustainability of the rally. While the decline in Spot Volume suggests weaker retail interest, the growing TVL and dominant long positions indicate that institutional and long-term investors are still confident in HYPE’s future.

If the rally can maintain its momentum and the support levels hold, HYPE could extend its gains and revisit higher price targets. Investors will need to keep a close eye on the Spot Volume, TVL growth, and market sentiment to assess whether this rally is built on solid foundations or driven by temporary market forces.