Key Insights:
- YPE is down 7% in 24 hours and 11% weekly, struggling beneath the $32 mark after a failed breakout attempt.
- Market structure remains fragile as the price is weighed down by recent token releases and shrinking market participation.
- Traders are closely watching the $33–$35 range, where a breakdown could lead to a move toward the high-$20s.
Hyperliquid’s HYPE token is currently trading around $32, facing significant downside pressure after a failed breakout attempt. The token has dropped over 7% in the last 24 hours and 11% weekly, significantly retreating from its $59 peak. This drop is fueled by decreasing spot volume and rising leverage, signaling increased risk of further declines.
The market for HYPE appears fragile, with technical indicators showing lower highs and weakening momentum. Spot volumes have shrunk, and there is growing concern that the token’s support levels in the low-$30s to high-$20s are at risk. As a result, traders are focusing on whether the $33–$35 range will hold as support. A breakdown below this range could push the price toward the high-$20s.
Leverage and Weak Market Sentiment
HYPE’s current price action is heavily influenced by leverage and the reduced speculative interest in the token. The market has experienced a shift, with the Assistance Fund continuing its buybacks. However, this ongoing demand from the fund seems insufficient compared to the recent release of tokens, which flooded the market. About 2.6% of HYPE’s circulating supply entered the market during a single event near November 29, putting additional pressure on the token’s price.
The derivatives market mirrors this situation, with spot and futures volumes down by about a third from recent highs. Open interest has also declined, suggesting that the market is becoming more cautious, with the potential for sharp price movements if supply hits the bid.
Market Volatility and Risk of Further Downside
The near-term outlook for HYPE seems tilted toward further downside, with the freshly unlocked supply continuing to weigh on the market. Despite some bulls claiming that current levels represent a temporary disconnect, the chart indicates that a retest of the high-$20s is likely. A decisive move below the $33–$35 support range could trigger a swift move toward the $28–$30 area, where liquidity is concentrated.
The market remains undecided, with the daily RSI stuck in the high 40s and short-term averages pressing down on the price. There’s no clear market control, and the price remains trapped within a descending channel that has capped rallies for months. Hence, the token will need to reclaim the $36–$37 range to signal any potential upside, but that would require stronger market participation and a healthy recovery in open interest.
