Hyperliquid reached a high of $47 before falling sharply. At the time of writing, Hyperliquid was trading at $41, down 10.4% on the daily charts, indicating strong bearish pressure.
As the market retreated, investor speculation returned and demand for short and long positions increased.
Hyperliquid Whale Takes 180,000 HYPE
After the decline of Hyperliquid (HYPE), investors rushed into the market to occupy a strategic position. Onchain Lens reported that a whale opened a long position of 180,000 HYPE with 10x leverage, valued at $7.78 million.
The whale set the position liquidation price at $32.8. The whale’s long position suggests optimism about a potential rebound.
In fact, the demand for long positions was mainly seen across the entire market. According to Coinayze data, the Long/Short ratio increased to 1.22, with long positions accounting for 54% of total positions.
Usually, higher demand for long positions suggests that traders are optimistic and expect prices to rebound in the near term.
However, as traders rushed to take long positions, the continued market fall accelerated the liquidation rate. Data from CoinGlass showed that $5.98 million in short positions were liquidated.
The rapid liquidation of long positions forced most traders to close their positions quickly, causing selling pressure in the futures markets. Thus, $1.06 billion was withdrawn from the futures market, while inflows fell to $1.02 billion.
This left the market with a negative forward net flow of -$39.6 million, a clear sign of increased outflow from the market. Usually, HYPE underperforms when the market shows relative weakness in derivatives.
Is the $40 support level under threat now?
Although whales have been optimistic and opened long positions, HYPE is showing greater weakness. The altcoin’s decline triggered a cascade of liquidations, as others rushed to close their positions, accelerating the downtrend.
In fact, sellers manage to win back the market. Looking at the Price Momentum Oscillator (PMO), which fell to 2.6, while the signal rose to 2.8.
The decline here suggests that the market is cooling off after an earlier jump and is likely entering a downtrend. At the same time, the downside volatility of the altcoin increased to 2.62.
With downward volatility outweighing upside, this suggests that sellers came out stronger than buyers. Traditionally, such a market configuration precedes a further fall in prices.
Therefore, if the market decline persists and traders close their futures positions, HYPE could lose the $40 support and fall to $38.
However, if the correction is just a cooldown after a strong jump, support will hold and $44 will be reclaimed.
Final summary
- A Whale opened a long position of 180,000 HYPE with 10x leverage, valued at $7.78 million.
- HYPE fell 10%, hitting a low of $41, at risk of falling below the $40 support level.
