HYPE Token Crashes 40% as $26M Liquidations Trigger Market Selloff
The HYPE token is plummeting considerably - over 40 percent since its annual peak of about $59 in September to about $35 currently...
Quick overview
- The HYPE token has dropped over 40% from its peak in September, currently trading around $35 amid a broader crypto market sell-off.
- Technical indicators suggest a continued bearish trend, with significant liquidations of long positions contributing to the downward pressure.
- HYPE's market share in the perpetual-futures market is shrinking, indicating a shift of traders to competing exchanges.
- A recovery is possible if HYPE surpasses the lower boundary of its megaphone formation, but current conditions remain unfavorable.
The HYPE token is plummeting considerably – over 40 percent since its annual peak of about $59 in September to about $35 currently – as crypto markets expand on their recent sell-off. Analysts also caution that the slide may persist provided that the technical indicators are bearish.
HYPE has fallen back in the daily chart to the 50 percent level of the Fibonacci and has broken below the lower edge of a megaphone pattern that had been forming since May. It has crossed its 50-day Exponential Moving Average (EMA), and both Supertrend and Ichimoku Cloud indicators have turned down.
In the meantime, the Average Directional Index (ADX) has already increased to 30 which indicates that the negative trend is gaining momentum. In case of the decrease of prices below the essential support point at 31.68, the fall may continue with increased velocity toward the new 2025 levels.
Nevertheless, an upward reversal that went past the lower boundary of the megaphone formation might trigger a recovery that would go to the level of the psychological mark of 50, which would nullify the existing bearish setup.
Liquidations Are Intensified with Traders Getting out of Positions.
One of the short-term headwinds of HYPE is the wave of optimistic liquidations that is sweeping the market. Having leverage-heavy traders on the opposite side of the crash, HYPE was among the entire most-liquidated assets of the day, with about $26 million of long positions liquidated.
Such a number comes after the $830 million wipeout in the wider market last Friday when close to 1.6 million traders suffered wiped out leveraged bets. A large number of those participants will remain marginalized, which will decrease the liquidity and speculative demand in the immediate future of the perpetual-futures markets.
Key bearish drivers include:
- Leveraged long traders have elevated levels of liquidation.
- Less speculation in the aftermath of the market purge on Friday.
- Lack of strong technical structure which validates the fact of continued selling pressure.
Weakness in Market share Shrinkage underlines Bearing.
To make things worse, the market share of Hyperliquid in the perpetual-futures market is only becoming smaller. The platform completed a volume of approximately $11.2 billion over the last 24 hours which is marginally below the volume of Aster at 11.24 billion. Lighter, edgeX Protocol and ApeX Protocol competitors came after with a valuation of $2.7 billion, $2.37 billion and $2.33 billion respectively.
In the past, Hyperliquid had enjoyed an overwhelming lead in the derivatives business however, its steady decline is an indication that the traders are shifting to other competing exchanges. Reduced volumes tend to lead to courtesy of liquidity and increased volatility-states that can increase the speed of diminishes.
The price of Hype may not come out of its negative pressure at any time soon, unless Hyperliquid stabilizes its own ecosystem and the trading flows start flowing in their direction again, as the skeptical mood of the wider crypto derivatives market.
- Check out our free forex signals
- Follow the top economic events on FX Leaders economic calendar
- Trade better, discover more Forex Trading Strategies
- Open a FREE Trading Account
Save