Hyperliquid’s HYPE token uptrend collapsed at $43.7 days ago. Since then, the altcoin has traded within a steep downtrend, closing at lower lows for four consecutive days.
As of this writing, Hyperliquid [HYPE] traded at $38.5, down 2.5% on the daily charts, reflecting strengthening downside risk.
Amid increased price volatility, whale speculation has surged extensively, with some anticipating a recovery while others anticipate another dip.
Hyperliquid whale takes $3 million worth of long
After Hyperliquid retraced from $43, whales in the futures took a break from the market. The Futures Average Order Size data from CryptoQuant showed no whale orders in the futures over the past three days.
This indicated reduced speculative activity from large market participants. Now that HYPE is holding ground below $40, whales have returned and resumed speculating.
Onchain Lens reported one such whale.
According to the on-chain monitor, a whale created a new wallet and opened a HYPE long position with 10x leverage. The whale took a long position of 80,000 HYPE worth $3 million.
Typically, when fresh whale capital flows into longs, it signals growing bullishness with whales anticipating a potential trend reversal.
Futures remain bearish
With Hyperliquid still struggling to hold above $40, long positions continue to be liquidated. In fact, $2.2 million in longs were liquidated in the past 24 hours, compared to $282k in shorts.
For that reason, most market participants have turned to short positions. According to CoinGlass data, the Long/Short Ratio dropped to 0.9508, relatively below 1.
However, market participants on Binance showed a higher demand for longs, with an average ratio of 1.2. This revealed a mismatch between Binance traders’ sentiments and those of traders on other exchanges.
Usually, when the ratio is below 1, it suggests that most traders are mostly taking short positions as they anticipate another drop. On Binance, however, traders have shown slight optimism in the market.
Is HYPE positioned to dip further?
Hyperliquid saw strong downside pressure, as participants flipped bearish across the market. The altcoin’s Relative Strength Index (RSI) made a bearish crossover, dropping to 58.
RSI still remained within bullish territory, suggesting a fierce fight between bulls and bears for market control.
At the same time, the Aroon’s up line fell from 100% to 71%, while the Aroon down plunged to 0.0%. This showed that while the structure remained bullish, momentum cooled and began to weaken.
Such market conditions reflected a market at a critical point. Thus, if downside pressure persists, RSI and Aroon Up will drop further, sending HYPE towards $35 with 30 as critical support.
However, if whale participation in futures markets attracts fresh capital inflows, HYPE could reverse and reclaim $42 again.
Final Summary
- Hyperliquid whale opened a HYPE long position with 10x leverage on 80,000 HYPE worth $3 million.
- HYPE extended its bearish streak, dropping 2.5% to a low of $37.
