Amid a broader crypto market pullback, Hyperliquid continued with its retrace, closing at lower lows for two consecutive days.
HYPE fell to a low of $29, breaching the $30 support after failing to hold $32. At press time, Hyperliquid [HYPE] traded at $29, down 4.9% on the daily charts, extending its 8.9% weekly decline.
With this drop, the altcoin fell below its short-term moving average (EMA20), indicating short-term downside pressure.
Hyperliquid faces weakened buy-side liquidity
HYPE extended the downside slip as demand for the altcoin fizzled, with bulls losing momentum in the quest to hold key levels.
Looking at the altcoin’s Demand Index on TradingView, the indicator fell sharply from 0.116 into negative territory. At press time, the Demand Index was around -0.188.
Source: TradingView
A drop into the negative zone suggests that selling pressure is stronger than buying pressure. Thus, the market entered a state of weak demand and dominating supply.
With weak buy-side liquidity, HYPE currently lacks the capacity to absorb sell pressure, positioning the altcoin for further declines.
Whales turn to long positions.
With the market showing weakness, traders have turned to the futures market for strategic positioning.
According to Onchain Lens, BigMachiBrother jumped into the market and opened a new HYPE (10x) long position.
The whale increased his long position by 23.8k HYPE worth $712k. Now that HYPE is trading below $30, the whale is at a $12k loss.
In addition to Machi, substantial capital has flowed into positions over the last 24 hours. CoinGlass data showed that $1.31 million was allocated to long positions.
Source: Coinglass
Across Binance and OKX, the altcoin’s Long/Short Ratio held above 1, indicating increased demand for long positions.
When most capital flows into long positions, it suggests that most traders are bullish and perceive the retrace as short-lived.
Can HYPE bulls defend $30?
Hyperliquidity weakened further as demand waned, with sellers displacing buyers to achieve total market control. As a result, HYPE fell below its Double EMA (DEMA), signaling short-term bearish pressure.
At the same time, the altcoin SMI Stochastic Momentum Index continued to roll over downward. This continued slip showed fading upside momentum, with buyers losing strength.
Source: Tradingview
Such market conditions leave HYPE in a weakened position with the likelihood of further losses on its price charts.
Thus, if capital flowing into longs fails to accelerate the upside momentum, HYPE will breach its demand zone at $28.
However, if sentiment shifts across the market and demand recovers, HYPE will reclaim its DEMA at $30 and target $33.6.
Final Summary
- Hyperliquid [HYPE] faced rejection at $32 and fell to $29 after breaching the $30 support level.
- BigbrotherMachi opened another long position as the market retraced and now holds a $12k loss.
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