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Key Takeaways:
- The $40 resistance zone is critical for any bullish recovery.
- Long liquidations and sentiment lows reflect deep fear, but also potential bottoming signals.
- A short squeeze could emerge if HYPE regains ground above $40, flipping momentum back in favor of bulls.
A newly created wallet deposited $1 million USDC into HyperLiquid and swiftly acquired over 25,500 HYPE tokens, stirring speculation across crypto circles. The move came just as HYPE’s price dropped 6% to $38.22 in the last 24 hours, reflecting growing unease in the market. Despite the dip, the sizable acquisition hints at deeper conviction—or strategic positioning.
This unexpected whale move arrives as overall market volatility spikes, with HYPE facing a sharp reversal from its recent highs. Traders are now closely watching whether this large accumulation signals a contrarian bet on a turnaround.
Trader Sentiment Hits Two-Month Low
According to Santiment, HYPE’s positive sentiment rating has plunged to 18.02—its lowest in over two months. The decline underscores a broader wave of uncertainty, with traders reacting sharply to price weakness and increasing volatility.
Historically, such extreme sentiment dips can either foreshadow a relief rally or precede further drawdowns. The prevailing fear could entice contrarian buyers, but without a broader market rebound, bullish momentum remains fragile.
Long Liquidations Top $932K—A Warning or a Washout?
CoinGlass data shows long liquidations on HYPE surpassed $932,000, heavily outweighing just $43,000 in short liquidations. This imbalance suggests that the majority of market participants were leaning bullish—only to be flushed out as price fell below key technical levels.
HyperLiquid itself accounted for $561,000 of the liquidations, indicating a sharp unwinding of leveraged positions. While these liquidations signal pain, they may also represent a market reset—potentially clearing the path for a more sustainable rebound if sell pressure subsides.
Break Below $40 Disrupts HYPE’s Uptrend
Technically, HYPE has now broken below its ascending channel support, ending its bullish structure for now. The price’s failure to reclaim the $40–$43 range has opened the door for further downside, with immediate support at $36.86. A deeper decline could test $30.86 if momentum remains weak.
The Stochastic RSI is also pointing downward, reinforcing short-term bearish pressure. Bulls must reclaim the $40 mark swiftly to counteract the breakdown and revive upward potential.
A key opportunity may lie ahead. CoinGlass’ liquidation heatmap shows a cluster of short liquidations between $40 and $42. If bulls manage to push HYPE back above this zone, it could spark a short squeeze—rapidly forcing bears to cover positions and boosting prices further.
Also Read: Hyperliquid Revenue Soars to $310M as HYPE Price Targets $48
Until then, however, the burden remains on bulls to reclaim this critical battleground. Without upward momentum, short pressure could weigh the price down further.
Despite the heavy selloff and crashing sentiment, the $1 million HYPE purchase suggests some players see value in the dip. Still, the technical breakdown and imbalance in liquidations create a high-risk, high-reward setup.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
I’m a crypto enthusiast with a background in finance. I’m fascinated by the potential of crypto to disrupt traditional financial systems. I’m always on the lookout for new and innovative projects in the space. I believe that crypto has the potential to create a more equitable and inclusive financial system.
