Hyperliquid Plunges 45% From Peak as Momentum Exhausts Near Support Test
Market Structure Shifts Lower
- HYPE down 24.6% over the last 30 days
- Almost 50% retracement of October/December’s gains
- Token now trades at $29.05 after a 45.86% decline from its $41.63 peak
Recently HYPE had a rough go of it, ultimately landing down 24.6% over the last 30 days. The sell-off culminated in an almost 50% retracement of October/December’s dramatic gains from HYPE’s IPO price to its all-time high of $49.79.
The brutal descent of Hyperliquid accelerated this week as HYPE shed another 6.2%, taking the total decline from its $41.63 peak to a devastating 45.86%. The token now trades at $29.05, matching both its weekly and monthly closing prices in what…
| Metric | Value |
|---|---|
| Asset | HYPERLIQUID (HYPE) |
| Current Price | $29.05 |
| Weekly Performance | -6.20% |
| Monthly Performance | -24.64% |
| RSI (Relative Strength Index) | 38.7 |
| ADX (Average Directional Index) | 26.4 |
| MACD (MACD Level) | -2.17 |
| CCI (Commodity Channel Index, 20-period) | -72.27 |
Momentum Exhausts at 38.69 – Matching October’s Pre-Rally Floor
The Relative Strength Index is at 38.69 on the daily timeframe, which is the first real oversold reading since the accumulation phase back in October. Historically, similar RSI readings below 40 led to a rally that was so intense on the daily that the weekly didn’t actually throw a single oversold reading.
Therefore, for those looking to join the oversold bounce, we recommend waiting for some sign that buyers have returned to the space before taking the plunge. LinearLayoutManager looks like an entry above $275 with the idea of adding above prior resistance at $292 and targeting $310. The risk is a close below $259.50. For aggressive traders, you might consider going long on a daily close above the three-day high at $268.75. Keep in mind, we would likely see some shakeout of weak longs under the swing low at $254 before higher prices are entertained.
ADX at 26.35 Keeps Directional Traders on Sidelines
At the 26.35 level, the ADX entry shows slight trending characteristics. This is a strong enough signal to stick with the current downtrend but not so strong that it implies a washout is imminent. A +DI of 14.80 compared to a -DI of 26.56 confirms that sellers are in charge, but it isn’t as if they are overwhelming the market. This is the type of situation where neither the range player nor the trend follower has the upper hand.
When you consider the weekly ADX compression around 35.97, there’s some potential energy for a greater shift. October’s identical ADX configuration ultimately resulted in a vigorous directional thrust once the measure exceeded 30. As a result, day traders must ready themselves for greater volatility if the ADX does exceed 30, that will- either help the decrease or the rally.
20-Day EMA at $32.87 Caps Recovery Attempts
Looking ahead, if the bears retain control of HYPE stock, this will continue as a bearish stack – not an encouraging indicator for bulls as they attempt to take back control. However, it wouldn’t be surprising if the $25.00 level reinstates itself as a critical level of support.
The most interesting part is how the 20-day EMA changes from being a support in November’s uptrend to a solid resistance following December’s breakdown. Three times over the past two weeks, the recovery was refused at this level, with more volume with each rejection. This former support level of $32.87 is now the red line that bulls would need to recapture to alter the intermediate trend.
Support Stacks Between $26.09 and $20.19 as Bears Target Monthly Pivots
There are several strong support areas beneath the price right now. The first significant one to watch would likely be the monthly S1 at $26.09, a level that has already held on two separate occasions this month. Under that, the monthly S2 at $20.19 could come into play if we see further strong downside momentum.
On the downside, the first stop on the elevator lower is $25. The final plunge to nearby structural support at $21 can’t be ruled out with short sellers growing in confidence and control.
The market structure is showing an intriguing compression consolidation between $26 support and $30 resistance. This 15% range looks very much like a coiled spring, and ADX readings indicate that the next trend move could be a strong one. Price action from October points in the direction of an eventual resolution to the upside, but you are only likely to get that if the $26 level does not produce a break first.
Bulls Need Decisive Reclaim of $30 to Avoid Deeper Correction
For bulls to generate a greater upside push, they will need a lot of buying interest to overwhelm sellers around the $32.87 level. If this is achieved, a push towards $35 (midpoint of mid-February gap) and possibly $36.72 (50-day MA) may enter the picture. However, broad industry uncertainty could easily cap any such rallies.
If the resistance level at $31.25 is broken, the next target is $35.85 to $38.67. These zones could act as magnets, lifting price into the April 2020 unfilled gap between $41.70 and $46.69. While aggressive long positions may chase upside if the stock closes above the 50-day EMA at $29.67, conservative strategies should focus on finding lower-risk opportunities with tighter stops.
Considering the readings were the most oversold in history on the daily chart by both RSI and Williams’ %R (by a long shot), it’s not surprising that silver (SLV) saw its best post-WW2 daily gain (6.82%) excluding days when the market was closed. For that reason, we would be even less surprised to see at least a partial retracement back to or below the 20-day EMA which was lost for the first time since mid-April on Monday.
