The uptrend of Hyperliquid’s HYPE token collapsed to $43.7 a few days ago. Since then, the altcoin has traded in a strong downtrend, closing at lows for four consecutive days.
At the time of writing, Hyperliquid (HYPE) was trading at $38.5, down 2.5% on the daily charts, reflecting strengthening downside risk.
Amid increased price volatility, speculation on whales has increased significantly, with some anticipating a recovery while others anticipate a further decline.
Hyperliquid whale takes $3 million long
After Hyperliquid rallied from $43, futures whales took a breather in the market. Average futures order size data from CryptoQuant showed no futures whale orders over the past three days.
This indicates a reduction in speculative activity by large market players. Now that HYPE is holding below $40, the whales have returned and resumed their speculations.
Onchain Lens reported one of these whales.
According to the on-chain monitor, a whale created a new wallet and opened a long HYPE position with 10x leverage. The whale took a long position of 80,000 HYPE worth $3 million.
Typically, when new whale capital flows into long positions, it signals growing optimism, with whales anticipating a potential trend reversal.
Futures remain bearish
While Hyperliquid still struggles to hold above $40, long positions continue to be liquidated. In fact, $2.2 million in long positions were liquidated in the last 24 hours, compared to $282,000 in short positions.
For this reason, most market participants have turned to short positions. According to CoinGlass data, the Long/Short ratio fell to 0.9508, relatively below 1.
However, market participants on Binance showed higher demand for long positions, with an average ratio of 1.2. This revealed a mismatch between the sentiments of Binance traders and those of traders on other exchanges.
Usually, when the ratio is below 1, it suggests that most traders are primarily taking short positions as they anticipate further decline. On Binance, however, traders showed slight optimism towards the market.
Is HYPE ready to fall further?
Hyperliquid saw significant downward pressure as participants turned bearish across the market. The altcoin’s Relative Strength Index (RSI) made a bearish cross, falling to 58.
The RSI has still remained in bullish territory, suggesting a tug of war between the bulls and bears for control of the market.
At the same time, the Aroon ascending line fell from 100% to 71%, while the Aroon descending line plunged to 0.0%. This showed that although the structure remained bullish, the momentum cooled and began to weaken.
These market conditions reflected a market at a critical point. So, if the downward pressure persists, RSI and Aroon Up will fall further, sending HYPE towards $35 with 30 as critical support.
However, if whale participation in the futures markets attracts further capital inflows, HYPE could reverse and reclaim $42 again.
Final summary
- The hyperliquid whale opened a long HYPE position with 10x leverage on 80,000 HYPE worth $3 million.
- HYPE extended its bearish streak, falling 2.5% to a low of $37.
