Why Hyperliquid’s $331M OTC deal matters as HYPE struggles to recover

HyperLabs unstaked 3.75 million HYPE, worth $331.4 million. According to the team, these tokens will not be sold on the open market.

Instead, HyperLabs arranged an OTC deal with an undisclosed institution. So far, 1.875 million HYPE has been distributed across five OTC buyer wallets.

Each of these wallets received 375K HYPE, implying that 50% of the 3.75 million HYPE OTC allocation has been distributed.

At the same time, Lookonchain observed that 1.25 million Hyperliquid [HYPE], worth $110.5 million, were restaked.

Usually, OTC sales are not inflationary, as such token movements do not increase supply on the open market. Thus, the sale tends to have a neutral impact on the market.

The restaked tokens further support this observation, as they reduce potential supply and signal long-term conviction from the buyer.

Is Multicoin reducing Hyperliquid exposure?

In addition to the HyperLabs sale, other institutions seem to be actively selling. Onchain Lens reported that Multicoin deposited another 67.5K HYPE, worth $5.92 million, into Coinbase Prime.

Over the past month, Multicoin has moved a total of 760.58K HYPE, worth $62.99 million, to Coinbase Prime. Often, deposits to exchanges reflect preparation to sell, and these tokens may eventually be sold.

For now, based on exchange activity, it seems these tokens have not been sold yet. In fact, Spot Netflow has remained negative over this period.

On the 8th of October, for example, Spot Netflow plunged to -$10 million, then fell to -$1.8 million at press time. A sustained period of negative Netflow suggests that more funds have flowed out of exchanges, reducing the amount of HYPE available on exchanges and potentially limiting immediate sell-side supply.

Any impact on HYPE?

Although HyperLabs’ sale did not negatively impact the market, HYPE is currently under extreme downside pressure. In fact, Hyperliquid fell from $94, lost the $90 support, and dropped to a low of $86.6 before slightly rising to $87 at press time.

Amid this price drop, the market’s downside momentum remains elevated. Notably, the Stochastic RSI formed a bearish crossover and fell to 19 as of writing, hitting deep into the bearish zone.

At the same time, the positive DI+ of the Directional Movement Index fell to 21, while the DI- has been on the rise, reaching 7. The rising DI- alongside declining DI+ suggests that downside pressure is strengthening.

Combined, these indicators suggest that downside momentum is strong and could continue. If the market pressure persists, Hyperliquid could revisit $84, with $80 acting as critical support.

However, if the market cools, downside risk could diminish, with HYPE likely reclaiming $90.

Final summary

• Hyperlabs unstaked 3.75 million HYPE, worth $331.4 million, and distributed to 5 OTC buyers’ wallets. 
• Multicoin deposited 67.5K HYPE, worth $5.92 million, into Coinbase Prime, raising total deposits to 760.58K HYPE, worth $62.99 million.