HYPE stood out as a rare outperformer amid a sharply declining crypto market, with its price hitting a new all-time high at the beginning of the month.
However, it has since pulled back by about 25% from the peak, and some analysts warn that the drop is far from finished.
The Bears Take Over
It was just days ago when Hyperliquid’s native token soared to a record high of over $75. Meanwhile, its market capitalization neared $17 billion, making HYPE one of the 10 largest cryptocurrencies.
However, the harsh bearish environment, combined with Arthur Hayes dumping all his positions in the asset, made the rally short-lived. As of this writing, HYPE is worth around $56 and has a market cap of roughly $12.5 billion.
According to many analysts, the worst is just beginning for the asset. The popular X user Altcoin Sherpa said, “some cool off is pretty normal,” predicting a slump to as low as $44 if the price drops below $54. At the same time, they still believe this is among the best altcoins investors can own for the long term.
For their part, BATMAN argued that “things are not looking good right now,” spotting the formation of “a very clean head and shoulders pattern” which indicates that a drop to $50 might come next. This is a common chart in which the price forms one large peak with two smaller ones on each side, and it is usually seen as a precursor to a pullback. Sjuul | AltCryptoGems identified the same development, saying:
“I have to be honest, HYPE looks a bit in trouble here. Basically trading in a massive Head & Shoulder pattern. If this starts to break down, it’s not gonna be pretty.”
Crypto with Haris ₿ also anticipates an additional move south. The X user revealed opening a $30,000 short of HYPE, predicting a plunge to the low $40s if the price breaks below $55.
Not so Quick
Some key factors, though, indicate that HYPE bulls may soon regain control. One clear sign is the substantial shift of funds from centralized exchanges to self-custody solutions in recent weeks, which has reduced immediate selling pressure.
Meanwhile, the X account Whale Factor opined that Hyperliquid is quietly becoming “a major powerhouse” in the market. According to their data, the project handled nearly half of all crypto token buybacks last year, and this buy pressure makes the asset look like “a very compelling hold” for this cycle.
“When a project generates this much real revenue, it becomes hard to ignore,” it concluded.
The post Why Hyperliquid (HYPE) Could Be Headed for a Much Bigger Correction appeared first on CryptoPotato.
