Hyperliquid (HYPE) has been turning heads in the crypto market this June, living up to its name with a powerful 36% rally and notching back-to-back all-time highs. The protocol’s native token recently reached $44.79, marking its second ATH within a week. With a surging market cap, rising trading volumes, and mounting bullish sentiment, HYPE appears poised to shake up the DeFi leaderboard. However, questions remain about whether this explosive momentum is built on solid fundamentals or simply speculative excitement.

At the time of writing, HYPE was trading just shy of its ATH at $44.68. The asset has seen significant interest from traders, as indicated by the strong bullish engulfing candle on its daily chart, accompanied by steadily rising volume. On-chain data confirms that traders are not merely holding HYPE, but actively participating in the rally. The Relative Strength Index (RSI) has surged to 70, confirming that the token is entering overbought territory, while the On-Balance Volume (OBV) stands at 5.62 million, continuing its upward trajectory alongside price gains.

These bullish technical signals suggest that buying momentum remains strong, and with $50 looming as the next psychological resistance, bulls appear far from exhausted.

What’s more, Hyperliquid’s market capitalization has ballooned from under $10 billion in late April to $14.92 billion by mid-June — a nearly 50% increase in less than two months. This capital inflow, combined with brief periods of consolidation and renewed breakouts, points to sustained investor interest. Importantly, HYPE’s breakout above the $14.5 billion market cap zone signals growing market confidence, putting it on the cusp of entering the top 10 cryptocurrencies by market cap. Should momentum continue at the current pace, crossing the $15 billion mark seems inevitable — potentially triggering the next leg up as bulls target further upside.

However, beneath this bullish facade lies a fundamental red flag: the total value locked (TVL) in Hyperliquid’s protocol remains low in comparison to its trading activity and market cap. According to data from DeFiLlama, HYPE’s daily decentralized exchange (DEX) volume recently surged beyond $600 million. Yet, the TVL stood at only $536.2 million. This stark imbalance suggests that while there is high demand and substantial liquidity flowing through Hyperliquid, traders may be more focused on short-term speculation rather than long-term capital commitment.

This TVL-to-volume disconnect could imply that HYPE’s rally is largely being fueled by high-frequency traders and momentum chasers rather than sticky liquidity providers or institutional users. In DeFi, a strong TVL typically indicates user trust and protocol adoption — two factors critical for long-term sustainability. If TVL fails to catch up with trading volume, it could limit Hyperliquid’s ability to retain capital during market corrections.

Moreover, although Hyperliquid’s rise has been impressive, the protocol still has to prove that it can evolve beyond a hot trading venue into a full-fledged DeFi ecosystem. While traders are clearly showing up for short-term gains, the sustainability of this growth may depend on broader participation — including builders, developers, and more committed liquidity providers.

To Hyperliquid’s credit, the project has captured significant mindshare in a short span of time. The protocol has managed to command attention during a time of market uncertainty, outperforming many legacy DeFi tokens. If its core team can translate this momentum into deeper user engagement, increased TVL, and long-term use cases beyond speculation, HYPE may just solidify its place in the DeFi elite.

In the near term, however, the road ahead will likely be volatile. As price accelerates and RSI enters overbought zones, corrections or temporary pullbacks should be expected. The key for HYPE will be how well it holds support levels during such dips — and whether on-chain indicators like TVL and unique users start trending upwards.

In conclusion, Hyperliquid’s meteoric rise has been undeniably impressive. But whether it can back up the hype with real utility, sticky capital, and sustainable growth remains to be seen. For now, HYPE stands as one of the most exciting — yet speculative — stories in crypto this June.