Hyperliquid [HYPE] has shown a notable decline of 16.57% in the past 24 hours, positioning it among the top performers in the market. Despite this setback, its monthly gains have hovered around 64.93%.
The current price movement of the token will play a crucial role in determining whether it will experience a substantial surge or further losses, particularly as market sentiment weakens.
Could HYPE Benefit from this Trend?
Examining the technical analysis of HYPE’s 4-hour chart, it reveals that the asset is currently operating within a descending channel marked by diminishing peaks and troughs. Investors are showing a growing interest in anticipation of a potential upward shift.
If the price breaks above the upper resistance line of the channel, a bullish breakout may occur, possibly propelling the value towards its peak of $35.7.
Presently, HYPE is trading within a support range at $21.59, which has previously acted as a bullish trigger on three separate occasions. Should this support level prove effective, HYPE could rebound by 65.44%, aiming to achieve the aforementioned peak.
Conversely, if the support level at $21.59 is breached, HYPE could potentially drop to the subsequent support level at $17.30. This level might serve as a driving force for a final upward surge, leading to a potential gain of 105.97%.
Mixed Signals from the Market
Currently, a comprehensive examination of technical indicators presents conflicting market sentiments, as evidenced by trader behavior around the support threshold.
The Parabolic SAR (Stop and Reverse), a tool for identifying trend patterns and reversals, displays dots positioned above HYPE’s current trend, suggesting a bearish market sentiment.
The presence of dots above the price indicates a pessimistic market outlook for HYPE, hinting at a possible further decline in its valuation.
On a separate note, the Relative Strength Index (RSI), a metric gauging the speed and extent of price variations to determine overbought or oversold conditions, is currently at 33.04, indicating an increase in selling pressure as it nears oversold territory. The RSI appears to be heading towards the oversold region (below 30), implying a potential easing of selling pressure at that level.
Should HYPE drop below the 30 mark, a rebound and recovery phase may ensue. Nevertheless, there is a possibility of HYPE altering its trajectory from the existing level without dipping below 30.
Dwindling Liquidity Impacting HYPE
HYPE has witnessed significant liquidity outflows, with its Total Value Locked (TVL) plummeting to $1.553 billion, a figure last recorded on December 14. This comes after reaching a peak of $2.244 billion on January 2.
Declining TVL figures are indicative of waning interest, a factor that typically exerts downward pressure on HYPE’s price and could potentially result in further declines.
If the trend of liquidity outflows persists, HYPE might continue on a downward trajectory from its current position, possibly descending to even lower thresholds.