Hyperliquid's HYPE token sees $292,000 in liquidations as large holders stack long positions against selling pressure, hinting at a risky market setup. With technical signals piling up, savvy investors are closely monitoring this hazardous scenario for a potential sharp price correction.
On-chain data shows that Hyperliquid (HYPE) has suffered $292,000 in liquidations on leveraged positions, a significant figure for an asset of this market cap. This volume of liquidations comes at a time when whales are aggressively accumulating long positions, attempting to maintain the price above critical support levels.
This dynamic creates a dangerous paradox. On one hand, large wallets are trying to support the price by absorbing selling pressure. On the other hand, each new highly leveraged long position increases the risk of cascade liquidations if the price breaks its support levels. Experienced traders recognize this pattern as a major warning signal.
Order book analysis reveals a significant concentration of liquidity just below current levels. If these zones give way, automatic stop losses from long positions could trigger a chain reaction, exponentially amplifying HYPE’s downward movement.
Movements from large addresses show an aggressive defensive strategy. These major market players are attempting to create an artificial floor by multiplying purchases, but this approach carries significant systemic risks. Unlike organic accumulation, these forced interventions create zones of fragility rather than genuine support.
The current behavior of whales resembles several historical situations where similar attempts to defend a price level ultimately failed. When too much capital is committed to concentrated long positions, the market becomes vulnerable to manipulation by actors seeking to force these liquidations.
Sentiment metrics also show a concerning divergence. While whales display apparent confidence, trading volumes remain abnormally low for this type of accumulation. This weakness in volume suggests a lack of conviction from the broader retail and institutional market.
HYPE’s technical analysis reveals several indicators converging toward a bearish scenario. The current price structure forms what traders call a “disguised distribution” where whale purchases mask a gradual exit of other market participants.
VP Order Blocks indicators show massive selling over 3 days at $49 and a major demand zone down to $17.
Currently, HYPE’s price appears to be heading toward this major demand zone. The 3-day RSI in oversold territory with the price near these levels would be a major buy signal.
As long as HYPE doesn’t break below $40 with volume, it remains trapped in this downward spiral toward new lows.
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Charles Ledoux is a Bitcoin and blockchain technology specialist. A graduate of the Crypto Academy, he has been a Bitcoin miner for over a year. He has written numerous masterclasses to educate newcomers to the industry and has authored over 2,000 articles on cryptocurrency. Now, he aims to share his passion for crypto through his articles for InvestX.
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