Grayscale ETF and whales: Why is Hyperliquid (HYPE) struggling?
The news surrounding Hyperliquid (HYPE) is marked by a striking contrast. On one hand, institutional optimism is growing. Grayscale has just updated its Spot ETF application with the SEC, opting for Anchorage Digital as the custodian under the ticker GHYP. This development, which follows recent filings by Bitwise and 21Shares, confirms the massive interest in this layer 1 specialized in decentralized finance.
However, the market was shaken by some concerning news. The Paradigm fund unstaked 2.14 million HYPE tokens, representing a colossal value of over $88 million. This move, accounting for roughly 5.7% of the circulating supply, immediately triggered fears of a massive liquidation among investors.
This selling pressure has been confirmed on chain. Data shows that the top 100 holders have reduced their positions by 40% this week. Furthermore, a mysterious whale recently liquidated $8.15 million worth of tokens. Currently, the price is trading in a range between $40.24 and $41.26, posting a slight decline of around 1.5% over 24 hours.
Is the key support for Hyperliquid (HYPE) in danger?
In terms of technical analysis, the situation for Hyperliquid (HYPE) is particularly tense. After reaching a local top around $45, the price suffered a severe correction to test the critical $40 zone. It thus confirmed a fakeout and was rejected from its double order block on the 3 day chart. From now on, only a reclaim of the trendline at $42 could prevent an imminent correction down to at least $33.
Technical indicators confirm this short term bearish momentum. The momentum indicator (MOM) plunged into negative territory at -1.39, highlighting buyer exhaustion. Additionally, the options platform Derive identified massive gamma walls at the $40, $45, and $50 levels. This suggests that the price could remain trapped in a highly volatile sideways channel.
To hope for a trend reversal, the bulls must absolutely defend the $38 threshold. A bounce from this zone would require breaking through the first immediate resistance at $42.
It is worth noting that HYPE is printing a 2 week bullish order block at its bottom. It is currently the only top 100 altcoin showing such accumulation. Therefore, it is important to step back and view the correction as an opportunity. The high timeframe momentum remains bullish.
How far can the price of Hyperliquid (HYPE) go?
The coming days will be decisive for the future of Hyperliquid (HYPE). In a bullish scenario, if the market manages to absorb the selling pressure, a rally toward the liquidity zone between $45 and $50 is entirely possible. A push beyond $50 could even trigger a massive breakout, propelling the token toward its ATH (all time high) near $59.
Conversely, the bearish scenario should not be ruled out. If the $38 support eventually gives way under the weight of liquidations, the token risks initiating a much deeper retracement. Analysts are targeting the $32 to $36 zone as the next safety net. The dominance of Bitcoin will also continue to dictate the overall sentiment on altcoins.
Is this the right time to accumulate HYPE before the potential approval of ETFs, or should we expect another steep drop? Traders will need to closely monitor institutional flows and whale movements to anticipate the next major market surge.
In any case, the launch of an ETF could truly restart the engine. This is especially true since the launch of HIP 4 (for prediction markets) could also arrive very soon.
Sources:
Related Articles:
