Hyperliquid (HYPE) is currently valued at about $24, marking a drastic drop exceeding 60% from its peak value. The cryptocurrency has slipped over 10% in the last day and nearly 13% over the week, indicating weak momentum and potential risks unless buying interest picks up.

Market Insights

With a 24-hour trading volume surpassing $550 million and a market cap around $6.6 billion, HYPE is currently positioned as the 25th largest cryptocurrency by market capitalization.

Breakdown of Price Movement

The HYPE/USDT pair has breached the lower boundary of its declining price channel, previously maintained for several months. This breaking point is shown in recent shared charts from analyst Duo Nine, who highlighted an “extremely bearish pattern”, suggesting that “$22 is likely next.”

Currently, the asset is trading below the 50% Fibonacci retracement level of $26, which has now become a resistance level, with no significant rebound from buyers detected yet.

Technical Indicators

The weekly chart reveals a negative trend in key indicators, with MACD showing a widening gap between its line and the signal line, reflecting values of -1.78 and 1.12 respectively. The histogram’s trend remains red, indicating a build-up of downward momentum.

HYPE Price Chart Source: TradingView

Meanwhile, the RSI is positioned at 37, suggesting a weak interest in buying, though not oversold at this moment. Traders are vigilant for hints of a possible local bottom; however, currently, no clear reversal signals are prominent.

Increased Whale Activity Amid Token Supply Events

Recent on-chain data indicates rising interest from large investors. According to Bitcoinsensus, three major buyers have deposited a combined $37 million USDC into Hyperliquid, placing substantial buy orders ranging between $15 and $25.6. Notably, one wallet now contains over $22.4 million worth of HYPE.

Additionally, the Hyper Foundation is proposing to burn 37 million HYPE tokens, equating to about 10% of the circulating supply, which could create lasting effects on market supply if accepted.

Further reports indicate another 10 million HYPE tokens are set to unlock this month, on top of the 10 million that have already been released since November, potentially exerting further pressure on prices.

CryptoPotato has reported on the launch of Hyperliquid Strategies, a fund designed with the ticker $PURR that began trading at the start of December, holding 12.6 million HYPE tokens and over $300 million in cash as a reserve linked to the Hyperliquid ecosystem.