HYPE Darts Below $28 as Rounding Top Pattern Triggers Technical Breakdown
Market Structure Shifts Lower
- HYPE declined by 19.5%, confirming a round top breakdown with critical support at $20.19.
- RSI plunged to 34.44, marking the first oversold signal since token launch and hinting at a potential snapback.
- ADX rose to 25.87, confirming a shift from consolidation to a strong downtrend.
The token HYPE declined by 19.5% during the week which has led to the confirmation of a round top breakdown and this has certainly alarmed the technical traders. Momentum indicators have shown the token to be oversold ever since its launch in November. The latest decline has shown the bears to be targeting a psychological level of $20 and the support has become critically low at $20.19.
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| Metric | Value |
|---|---|
| Asset | HYPERLIQUID (HYPE) |
| Current Price | $27.93 |
| Weekly Performance | -19.49% |
| Monthly Performance | -32.60% |
| RSI (Relative Strength Index) | 34.4 |
| ADX (Average Directional Index) | 25.6 |
| MACD (MACD Level) | -2.43 |
| CCI (Commodity Channel Index, 20-period) | -125.75 |
RSI Plunges to 34.44 – First Oversold Signal Since Token Launch
With HYPE once again in the spotlight due to its recent surge in volatility however, broader market cyclical conditions also bear watching as tailwinds to risk aversion and the prospect of binance premium compression, are being counted on.
When any asset – cryptocurrency, stock, or commodity – becomes so oversold, a powerful snapback rally is likely. For example, a large percentage of traders and investors enter short positions after a significant decline to capitalize on downside potential.
ADX at 25.61 Confirms Trend Shift From Consolidation to Directional Move
Trend strength readings spiked in December as ADX went from 12.45 to 25.87 in one easy move. When in this zone, we know that there is strength to the downtrend, but it hasn’t quite reached those extreme readings above 40 that we often see at the climax of capitulation phases.
What is most telling about the ADX surge is that it came at the same time as HYPE lost the rounding top neckline. The technical pattern completion put sellers in a position of strength. As a day trader, adapt your game plan to a market that is trending rather than the range-bound chop that has recently been in play. The launch of the Hyena platform offers some underlying support while the technical picture continues to worsen.
20-Day EMA at $35.92 Flips From Support to Resistance Ceiling
If you look at the moving average structure, you can easily understand the story the price tells. Now, HYPE is trading decidedly below all the primary EMAs, while the 10-day ($ 30.20), 20-day ($ 35.92), and 50-day ($ 38.61) are stacked bearishly above. The breakdown rate was faster than expected – since the 20-day EMA was good support just two weeks ago.
What is most notable is that the 50-day EMA morphed from a level that HYPE never tested during its November-December rally to become strong resistance on every relief rally. Such a total inversion of the MA (moving average) structure usually happens before a long-term downtrend, but it is hard to apply such comparisons to a token with such short price history.
Resistance Stacks Heavy From $32 Through December’s $41.63 Peak
Sellers have built solid resistance above present levels to thwart any bounce. The closest one is at $32.10, which is the 10-day EMA in sync with the weekly pivot and the rounding top pattern’s breakdown. This triple confluence forms a strong hurdle evident from the fact that premature bottom-fishing got stuck here.
Bulls are now trying to defend the monthly S1 pivot at $26.09, which produced a minor rebound before being violated by new selling pressure. The stronger support area is ranging from $20.19 to $20.69, as the monthly and weekly S3 pivots are meeting the round $20 handle. This is the ultimate technical defense before crossing into unknown waters beneath the ICO price.
The market structure also highlights the emotional nature of market participants who have experienced a material drawdown in their positions, leading to panicked selling episodes. Prices pushed back below all-time highs, and subsequent recovery attempts have failed, turning the previous support into resistance.
Technical Breakdown Opens Path to $20 Unless Bulls Reclaim $32
Buy walls holding 15 August lows need to be monitored to project downside potential. This time, if they break, bulls will likely be out of the races, raising concerns the USD bears are back in control.
If you consider the increasingly bearish feedback loop on Wall Street, it wouldn’t be surprising to see the stock plummet to $20 in one violent wave. Be especially cautious trading these shares long ahead of its next earnings report; the risk of a breakdown under the hallmark $23 level directly following results is growing exponentially.
While momentum indicators currently sit at oversold levels and are starting to show some positive divergence, the fact remains that price structure has been severely damaged and a good deal of repair must be done before HYPE can be considered a healthy and stable long-term growth asset. This is a process that will likely take several weeks to play out as oversold conditions are worked off and enough technical damage is repaired to allow for sustained follow-through buying post any relief rally in the interim. The most probable near-term path sees a wide consolidation pattern take shape with $26-$30 representing short-term overhead resistance and $10 representing the first key downside support. Although a test or possible undercut of the early-bull highs around $7 is unlikely, it can’t be completely ruled out in the potential for one last bout of panic liquidation to materialize before the worst of the post-bubble downtrend is behind us.
