Hyperliquid (HYPE) is on the verge of recovery thanks to accelerated staking, with OI reversing upward.

Hyperliquid (HYPE) is signaling a clear recovery as the price surpasses the $26.00 USD mark at the time of recording on Thursday, marking the return of buyers after a prolonged accumulation phase. This upward momentum is supported by positive on-chain indicators, along with a significant increase in derivatives market activity, reflecting growing investor confidence.

Hyperliquid’s DeFi growth reinforces recovery expectations

Staking activity on the Hyperliquid network increased by nearly 6% on Thursday, bringing the total value of assets locked (TVL) to $1.37 billion USD. This development reflects increased confidence from long-term investors, who are willing to “lock in” capital to bet on the project’s sustainable prospects.

Notably, this recovery marks a clear reversal in Hyperliquid’s total value locked (TVL) within the decentralized finance (DeFi) ecosystem, after dropping to $1.3 billion USD on Tuesday from an all-time high of $2.79 billion USD set on September 19. The rapid rebound in TVL indicates that underlying demand remains steadily supported.

Essentially, staking is often associated with long-term holding strategies, which reduce circulating supply in the market. This typically has a positive effect on price, especially as investor sentiment gradually improves.

Total value locked (TVL) in Hyperliquid’s decentralized finance (DeFi) ecosystem | Source: DefiLlama. Meanwhile, Hyperliquid’s derivatives market also signals optimism as open interest (OI) in futures contracts increased to $1.41 billion USD on Thursday, compared to $1.3 billion USD the previous day. The rise in OI — representing the total notional value of open contracts — indicates that retail investor capital is returning and reflects expectations of a short-term breakout in price.

Open interest (OI) in HYPE | Source: CoinGlass.## Technical outlook: Hyperliquid ready for a breakout

Hyperliquid is trading around the $26.00 USD mark as of Thursday, reflecting a clear improvement in overall market sentiment. This recovery is supported by the Relative Strength Index (RSI) on the daily timeframe approaching the neutral level, indicating that price momentum is gradually shifting from balance to a more positive trend.

Daily HYPE/USDT chart | Source: TradingView. Additionally, the daily MACD indicator remains above the signal line, signaling increasing risk appetite among investors. If the green histogram bars above zero expand further, HYPE could accumulate enough momentum to push toward a breakout above the 50-day exponential moving average (EMA), currently at $28.22 USD.

However, the short-term outlook still faces several challenges. The three key moving averages — the 50-day EMA at $28.22 USD, the 100-day EMA at $32.13 USD, and the 200-day EMA at $33.25 USD — are all trending downward, implying that the main trend remains bearish. To confirm a sustainable reversal to an uptrend, Hyperliquid needs to decisively close above this cluster of moving averages and break the existing downtrend line.