Hyperliquid [HYPE] is under pressure. At the time of writing, the decentralized exchange (DEX) token was down 9.1% in a week, and almost 20% down over the past 30 days.
Some whales are now unstaking their HYPE and depositing the tokens onto centralized exchanges. According to AMBCrypto’s findings, this unstaking behavior may be getting more common among both retail and institutional investors.
With the price action leaning bearish, a descending channel can be seen on the price charts too.
On the bright side, the exchange has been expanding its revenue streams. Traders are paying priority fees to improve queue positions. This focus on execution rather than just trading volume can strengthen the long-term business model.
Even so, the shadow of institutional selling still looms over HYPE. What will the upcoming price trends look like though?
The big liquidation warning for Hyperliquid token
Using the liquidation data of the past month for HYPE, analyst Base Case D made the argument that a liquidation cascade might be around the corner.
A big magnetic zone of long liquidations sat at $52.38. A minor drop could hit these long liquidations, forcing these positions to close, amplifying the sell pressure in the short term and possibly leading to a liquidation cascade.
This meant that a cautious-to-bearish bias may be warranted in the short-term, the analyst concluded.
Multi-timeframe analysis makes a long-term bull case for HYPE
A sharp flush from liquidations tends to follow the longer-term trend thereafter. And yet, the wider market sentiment, especially for Bitcoin [BTC], has been firmly bearish lately.
The upward break above the swing high (green) hinted at a bullish swing structure continuation. The Fibonacci retracement levels plotted the potential bearish targets before the long-term uptrend can commence.
As things stand, a drop to $32-$42 would not be a surprise.
This, because the internal structure (dotted white) was beginning to turn bearish at press time.
This shift was more evident on the 4-hour chart. Though the OBV appeared to be flat, the price has been falling lower. A two-month range formation, whose low was at $53.3, has been breached too.
Hence, a deeper retracement towards $32 cannot be ruled out.
Final Summary
- Hyperliquid’s long-term trend was bullish, but a deep retracement may be a possibility in the coming weeks.
- In the near-term, a price drop below the $52-magnetic zone could trigger a wave of forced selling.
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