Hyperliquid (HYPE), one of the recently popular assets of the cryptocurrency market, has led its investors to a cautious wait with its value loss exceeding 25% since the beginning of the month. While the token, moving within a descending trend channel, is floating towards critical support levels, market actors are discussing whether this decline is a buying opportunity or a harbinger of a deeper collapse. With the weakening of technical indicators, the risk of the price losing another 10% in value in the short term increases the pressure on the digital asset.
Bear Domination and Technical Outlook
Examining the daily charts, it can be seen that the HYPE price recently broke out of a “descending wedge” formation and made an attack towards the local resistance at $ 35. However, the failure to maintain permanence above this zone and the successive unsuccessful closings created a clear sign of fatigue in the market. The Relative Strength Index (RSI) data has entered a parallel downward channel, making it clear that the bulls have lost control and the momentum has turned in favor of the sellers.
This withdrawal process has the potential to push the price towards the critical support band between $27 and $28. If the selling pressure continues with its current determination, it seems inevitable that the price will test the psychological limit at $ 25. The current market structure whispers that the short-term bearish trend will be maintained unless a hold above $30 is achieved by the close of the week. While sellers’ appetite continues to pressure the price downwards, data on the volume side points to a strategic silence.
Volume Drying and Possible Scenarios
A notable aspect of the depreciation on HYPE is that the decline is due to weakening buying appetite rather than aggressive selling. The gradual drying up of trading volumes strengthens the possibility that this pullback in the market is a technical correction rather than a permanent trend reversal. While the majority of investors prefer to stand aside and wait, slowing down the liquidity flow in the market, it is vital for the volume to revive for a possible upward reaction.
If the token manages to hold on to the mentioned support zone and the buying volume comes into play again, a new move towards the $35 resistance can be observed. In order for the $40 target to come back to the table, the bulls must make a strong return to the market. In a contrary scenario, if it falls below $25, the downtrend can be expected to accelerate. For now, the market is holding its breath to see which way HYPE will swing from this technical junction.
