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- Hyperliquid’s price is under pressure from coordinated whale and institutional shorting.
- The token’s price is at a critical support level of $36, signaling a make-or-break moment.
- Despite short-term weakness, HYPE’s long-term outlook remains bullish due to strong on-chain fundamentals and high DEX volume.
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The crypto market is experiencing a period of heightened volatility, and the Hyperliquid (HYPE) token has found itself at the center of a tug-of-war between bullish and bearish forces. While HYPE’s on-chain metrics point to underlying strength, its price has been under pressure as institutional players and large-scale investors, known as “whales,” coordinate shorting campaigns.
The recent decline in HYPE’s price, which saw it fall from a high of $51, was triggered by a notable attack on the ecosystem’s pre-launch XPL token. This event sparked a wave of liquidations and raised concerns about the platform’s risk profile, contributing to the broader seller-biased sentiment across the crypto market.
Institutional Betting Against HYPE
On-chain data reveals that significant players are actively taking short positions against the Hyperliquid token. A single whale, for instance, recently executed a short position on HYPE worth approximately $3 million. While this position initially faced an unrealized loss, it highlights the bearish conviction among some of the market’s biggest participants.
Even more prominent is the activity of institutions like Abraxas Capital. The firm’s massive sell position on HYPE, valued at $64.39 million with 5x leverage, signals a major bet against the altcoin’s price. This strategic move is part of a broader shorting portfolio for Abraxas Capital, which also includes other major cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), and Solana (SOL).
HYPE’s Technical Price Dilemma
From a technical analysis perspective, Hyperliquid’s price action presents a complex picture. The token has broken below a key rising trendline but continues to hold above the SuperTrend indicator, creating mixed signals for traders. Since its peak in mid-July, HYPE has been confined within a trading range of $36 and $50. Despite the consolidation, the token has shown a pattern of higher lows, suggesting a potential for a strong upward move.
The $36 support level is a critical point for HYPE. A successful hold at this level could provide the foundation for a renewed attempt to break the $50 resistance. Conversely, a breakdown below this zone would invalidate the current bullish structure and could lead to further price declines. The Chaikin Money Flow (CMF) indicator, currently at -0.25, reinforces this cautious outlook by indicating a net outflow of capital from the token.
Hidden Strength Despite Short-Term Weakness
Despite the shorting pressure and price consolidation, Hyperliquid’s on-chain data reveals a different story. The platform’s open interest remains high, and its decentralized exchange (DEX) volume has reached record levels, with $398 billion in volume over the past month. These metrics affirm the ecosystem’s robust underlying health and strong user activity, even as the token’s price struggles.
In summary, Hyperliquid faces a dual challenge: short-term bearish pressure from whales and institutions, and a mixed technical outlook. However, the project’s strong on-chain fundamentals suggest a bullish long-term outlook. Traders and investors should closely monitor the actions of these big players and HYPE’s price structure for clues on its next major move.
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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
Also Read: Hyperliquid Revenue Hits $106M in August as HYPE Token Soars to All-Time High
I’m your translator between the financial Old World and the new frontier of crypto. After a career demystifying economics and markets, I enjoy elucidating crypto – from investment risks to earth-shaking potential. Let’s explore!
