During the broader market pullback, hyperliquid (HYPE) fell from $45 to a local low of $40. At press time, it was trading at $41, up 0.6% on the daily chart.
Despite this slight rebound, the token has fallen 9.09% over the past week, leaving HYPE on the defensive as market sentiment, including among whales, becomes increasingly bearish.
Whale dumps HYPE tokens worth $8.15 million
After HYPE fell to $40, whales exited the market to avoid further losses while locking in their gains. According to Onchain Lens, a newly created wallet withdrew 199,999 HYPE from Bybit and sold it for $8.15 million at $40.77 per HYPE.
After the sale, the whale then withdrew the funds from Hyperliquid and deposited them into Binance, effectively leaving the market completely. Such a hasty decision to exit the market revealed the whale’s short-term panic, driven by fear of a potential decline from current levels.
Along with this, foreign exchange activity also echoed this selling frenzy. According to CoinGlass data, sellers have dominated the market over the past week.
During the said period, the altcoin saw $259.9 million in spot inflows, compared to $236.2 million in outflows. As a result, Spot Netflow has soared to $23.69 million at the time of writing, a clear sign of aggressive selling.
Traditionally, increased sales, particularly of whales, have weakened the market, leading to lower prices.
Whales are aggressively shorting
In addition to continued whale selling, active players on the futures side are engaging in aggressive short selling. Chain goal reported that a whale opened a HYPE short position with 5x leverage valued at $13 million.
With the price of HYPE fluctuating widely, this position already represents a profit of $104.9k, but the whale spent $2.5k in funding.
Interestingly, most market participants are currently selling short. As such, the altcoin’s Long Short ratio fell below 1 to 0.95 at press time, suggesting that market participants were bearish and expected prices to fall in the near term.
Is $40 Support Under Threat?
Hyperliquid has faced increased downward pressure, particularly from whales, since the market returned to $40. As a result, the bearish momentum strengthened.
In fact, the Momentum Index (MOM) fell 5 into negative territory at -1.39, signaling weakening market strength as bears take control of near-term momentum.
Likewise, the Stochastic Momentum Index (SMI) fell into negative territory around -19.3, further validating this bearish force.
Typically, when these momentum indicators are defined in this way, they signal the likelihood of a continuation of the trend. So, if sellers, including whales, continue to sell at $40, this support will break and the price will fall to $38.
However, if this level holds, the altcoin could rebound to $43.
Final summary
- The hyperliquid whale hastily unloaded 199,999 HYPE for $8.15 million.
- HYPE is facing extreme selling pressure, while whales are shorting the market.
