Hyperliquid's native token HYPE has continued its downward trajectory, falling more than 2% on Monday as broader risk aversion in the cryptocurrency market weighs on sentiment. The latest decline extends last week's losses and has brought the token closer to a critical technical support level that could determine the near-term direction.
Derivatives Data Signals Weakening Retail Demand
While institutional inflows into HYPE-focused ETFs have remained resilient, derivatives market indicators point to a notable shift in retail trader behavior. According to data from CoinGlass, futures Open Interest (OI) for HYPE has declined by over 1% in the past 24 hours to approximately $2.7 billion. A drop in OI alongside falling prices typically suggests that leveraged traders are closing positions rather than initiating new bullish bets.
Total liquidations over the same period reached $2.8 million, with long positions accounting for roughly $2.3 million of that figure. This imbalance indicates that bullish traders have been forced to exit, adding to the selling pressure. Additionally, HYPE's funding rate has fallen to 0.0275%, reflecting a growing preference among traders for short positions and reinforcing expectations of further downside.
Institutional Inflows Offer a Counterbalance
Despite the bearish signals from the derivatives market, institutional demand for Hyperliquid has remained steady. Data from CoinGlass shows that HYPE-focused ETFs recorded $10.36 million in net inflows last week, marking the ninth consecutive week of positive flows. This persistent institutional buying suggests that longer-term investors continue to accumulate the asset, even as retail sentiment sours.
The divergence between institutional and retail activity is a key theme in the current market environment. While geopolitical tensions, including the ongoing situation between the United States and Iran over the Strait of Hormuz, have fueled a broader risk-off mood, institutional players appear to be taking a more measured approach.
Technical Outlook: 50-Day EMA in Focus
HYPE is currently trading near $65, having broken below a key ascending trendline that previously provided support around $68.50. The next major support level is the 50-day Exponential Moving Average (EMA) at $63.13. A decisive daily close below this level could accelerate selling pressure and expose the token to the next support zone near $53.71.
Technical indicators are flashing caution. The Relative Strength Index (RSI) has slipped to around 44, moving below the neutral 50 level and indicating weakening buying momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) has crossed below its signal line, with the negative histogram expanding, signaling that bearish momentum is building.
For buyers to regain control, HYPE would need to reclaim the broken trendline and push back toward the previous swing high at $75.58, which now serves as the primary resistance level. However, the current technical setup suggests that a deeper correction is becoming increasingly likely.
Broader Market Context
The weakness in HYPE is part of a wider trend affecting the cryptocurrency market. Similar dynamics are playing out in other altcoins, as seen in the recent analysis of Ethereum's rally facing resistance at $1,800 and Cardano's recovery test after a wallet exploit. Investors are closely watching key support levels across the board.
In the broader financial landscape, geopolitical risks and earnings season are also influencing sentiment. For instance, the Hang Seng Index faces key tests from China GDP data and US-Iran tensions, while Nvidia's AI chip dominance is being challenged by startups and big tech rivals. These factors contribute to the risk-off environment that is pressuring HYPE and other digital assets.
In summary, HYPE's near-term outlook hinges on the 50-day EMA at $63.13. A break below this level could pave the way for a move toward $53.71, while continued institutional ETF inflows may provide a floor over the longer term. Traders should monitor the derivatives market for signs of a shift in sentiment.
This article is for informational purposes only and does not constitute financial advice.
