Hyperliquid – Analyzing impact of $3.9M whale buy on HYPE’s price

Key Takeaways

Hyperliquid whale returned after 5 months and purchased $3.94 million in HYPE as the price retraced from the ATH. Hype Futures participation has slowed down, with Perpetuals volume declining by $8 billion.

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After reaching a new ATH of $52.12 a day ago, Hyperliquid [HYPE] retraced, hitting a low of $46.

At press time, HYPE was trading at $47.7, marking a 4.7% decline over the past 24 hours.

Before this dip, the altcoin had been on an upward trajectory, hiking by 13% weekly charts. Amid this retracement, investors, especially whales, took the opportunity to buy the dip. 

Hyperliquid whales continue to buy

According to Onchain Lens, a previously dormant whale returned after five months and deposited $5.72 million into Hyperliquid. The whale used $3.94 million of that to acquire 81,572.11 HYPE tokens.

Notably, the whale still holds $1.78 million in reserve, with an open buy order for HYPE at $48, suggesting continued interest in accumulating.

When whales re-emerge and begin accumulating, it often reflects strong market conviction, a classic bullish signal.

In fact, exchange activity has echoed this market conviction. According to CoinGlass, HYPE has recorded a negative Spot Netflow for two consecutive days, hitting an all-time low of -$13.9 million on the 27th of August. 

At press time, the altcoin’s Netflow was -$4.04 million, indicating sustained exchange outflows compared to inflows. 

Historically, increased exchange withdrawals, particularly from whales, have led to intense upward pressure on an asset’s price. 

Futures participation slows down

Surprisingly, despite HYPE’s rally to an ATH, the Futures market has failed to keep up with the momentum. 

According to Defillama data, Hyperliquid’s Perpetuals Volume has declined for four consecutive days, dropping from $21 billion to $13 billion. 

Typically, such a drop indicates reduced participation in futures; thus, overall market leverage is decreasing. 

Despite the declining participation, sentiment in the futures remains bullish as longs remain dormant.

At press time, HYPE’s Funding Rate was 0.02 and remained within positive territory for two weeks. 

When these two metrics are in such a manner, they suggest that longs are paying shorts, but new traders are avoiding the market.

Thus, Futures are experiencing a bullish bias not backed by significant participation, which warns of a potential market correction.

Can HYPE’s momentum hold?

According to AMBCrypto’s analysis, Hyperliquid is still experiencing strong upward momentum, despite reduced participation in futures, as whales boost demand on the other side.

At press time, TradingView data showed strong upward momentum, with the Relative Strength Index (RSI) rising to 56, edging into the bullish zone.

At the same time, its Stochastic RSI surged to 72, further validating the strength of the uptrend. When momentum indicators are in such a manner, it signals buyer dominance and potential for the trend to continue.

Therefore, if the prevailing market conditions hold, Hyperliquid will retest $52 resistance; a break through will see HYPE make another ATH.

Conversely, if reduced participation in futures results in investors withdrawing capital, the move will fail and revert to $45.6.