Hyperliquid's Flow Surge: Volume Breakout vs. Momentum Divergence

The rally is being confirmed by raw on-chain flow. HYPE's trading volume surged to $989.39 million, marking its highest level since November 2025. This massive spike in activity followed a breakout from a prolonged price consolidation, a classic pattern where volume confirms a trend transition rather than signals exhaustion.

The price action has been explosive. The token has rallied over 36% in the last 30 days and surged about 71% in the past two weeks. This outperformance is stark against a broader market that saw global risk assets lose roughly $6 trillion in early 2026. The move has pushed the price above key technical levels, including a descending channel and the 0.382 Fibonacci retracement, with immediate resistance now near $41.

The sustainability of this breakout faces a major test. A Feb. 6 unlock of 9.92 million HYPE worth around $335 million looms as a critical supply event. The rally's strength will be judged by whether demand can absorb this new supply without a significant pullback, turning the recent volume surge into a lasting structural shift.

Momentum Divergence: The Weakening Engine

The rally's engine is showing signs of fatigue. While price climbed, the underlying flow signal turned negative. On-Balance Volume (OBV) trended lower between January 28 and February 5, even as the token's value rose. This divergence is a classic warning that fewer spot buyers are supporting the move, indicating weakening real demand beneath the surface price action.

That lack of conviction was met with aggressive selling at key levels. The token recently rejected a breakout attempt near the $36 zone, forming a long upper wick on its latest candle. This rejection shows sellers stepped in forcefully at higher prices, capping gains and highlighting growing supply at resistance. The pattern is repeating, with momentum indicators now forming another bearish divergence, suggesting sellers are regaining control.

Social dominance remains muted, which reduces overbought risk but also signals limited retail FOMO. This lack of broad discussion means the rally hasn't attracted the typical speculative frenzy, helping HYPE avoid extreme positioning. Yet it also points to a more cautious, possibly exhausted, market. The setup is unstable: spot momentum is fading while derivatives leverage is building, creating a vulnerable equilibrium that a single negative catalyst could break.

Catalysts and Liquidity Zones

The primary near-term catalyst is the upcoming HIP-4 launch. This event, which introduces fully collateralized outcome contracts, is the central driver behind the recent rally. Social dominance remains muted, which reduces the risk of an overcrowded, overbought position and helps sustain the trend by avoiding a speculative peak.

Key technical levels define the path ahead. Immediate resistance sits near $41.25, the 0.5 Fibonacci retracement level. A decisive break above this zone opens the path toward the next major target at $46.15, the 0.618 Fibonacci level. The price must overcome this resistance to validate the bullish breakout.

The critical support level is at $28. A breakdown below this point would invalidate the current bullish thesis and risk a slide toward the $25 psychological and technical floor. This level is the first line of defense for the rally, with a clear liquidation cluster near $26 adding to its significance.