Hyperliquid's native token HYPE continued its downward trajectory on Wednesday, trading below the $60 mark as buyers struggled to overcome the 50-day exponential moving average (EMA) at $62.70. The token's decline reflects a broader shift in market sentiment, driven by fading institutional demand and weakening retail participation.
Data from CoinGlass shows that HYPE-focused exchange-traded funds (ETFs) recorded net outflows of $700,000 on Tuesday, following $7.3 million in withdrawals the previous week. This marks a notable reversal after nine consecutive weeks of inflows, suggesting that large investors are reducing exposure. The trend aligns with broader caution in the crypto market, as seen in Solana's struggles below $80 amid governance exploit concerns.
Institutional Activity Raises Eyebrows
On-chain analytics platform Lookonchain reported that a wallet linked to Multicoin Capital transferred 395,570 HYPE to Coinbase Prime and requested the unstaking of 211,486 HYPE. The firm had accumulated roughly 606,091 HYPE about five months ago at an average price near $30, meaning any reduction in holdings could signal profit-taking or a bearish outlook.
Derivatives data further underscores weakening sentiment. Hyperliquid's futures open interest (OI) fell 2.4% over the past 24 hours to $2.5 billion, reflecting a reduction in leveraged positions. Long liquidations totaled $2.8 million, far exceeding short liquidations of $133,430, indicating that bullish traders bore the brunt of the sell-off.
Mixed Signals in Trading Activity
Despite the price decline, trading volume rose 41% to approximately $2.4 billion, suggesting that market participation remains robust. The funding rate edged up to 0.0009% from -0.0013% a day earlier, hinting at a slight improvement in sentiment. However, the near-zero reading still points to indecision among futures traders rather than a decisive bullish shift.
This cautious environment mirrors trends in other assets, such as Ethereum's attempt to break above its 100-day EMA amid rising exchange outflows.
Technical Outlook: Key Levels to Watch
From a technical perspective, HYPE remains below the 50-day EMA at $62.70, reinforcing short-term bearish momentum. However, the token continues to hold above the 200-day EMA at $49.95, preserving its long-term uptrend. Sellers have pushed HYPE below the critical $60.41 support level, with the next demand zone around $54.19.
The Relative Strength Index (RSI) sits near 48, below the neutral 50 mark, indicating weakening buying pressure. The Moving Average Convergence Divergence (MACD) remains below its signal line in negative territory, suggesting that any recovery attempts could face resistance.
For bulls to regain control, HYPE must first reclaim the 50-day EMA at $62.70. A breakout above that level would shift focus to the next resistance at $66.22, followed by a descending trendline near $69.87. Clearing these barriers would improve the technical outlook and increase the likelihood of a retest of the all-time high at $76.93.
Until then, weakening ETF demand, cautious retail positioning, and bearish momentum indicators suggest the path of least resistance remains to the downside. The $54 support level will likely determine HYPE's next major move.
This article is for informational purposes only and does not constitute financial advice.
