Hyperliquid's HYPE Token Plummets 20% as Bearish Momentum Intensifies
1min read Hyperliquid, a decentralized exchange (DEX) token, faced intense bearish momentum in March, with its price falling below the $18.5 support level on March 3. This level, established in January, had been robustly defended for two months. The market sentiment and selling pressure forced significant losses over the past two weeks, and the fall was not halted by whale purchases. The whale trader who caused a $4 million loss to Hyperliquid’s HLP vault was active recently, sparking debate among analysts about repeatable, profitable patterns.
One potential solution to combat the problem is to reduce leverage limits, which could negatively impact HYPE’s price. The 12-hour chart highlighted the strong bearishness behind HYPE, with the market structure turning bearish since mid-February after falling below the $22.2-level. The loss of $18.5 cemented the next leg south. This was accompanied by an On-Balance Volume (OBV) in freefall, indicating heavy selling volume. The Relative Strength Index (RSI) also remained below 50, reflecting intense bearish momentum on this timeframe.
The $12-support level was previously tested briefly in the second week of December. In recent hours, HYPE saw another reaction from it. It was unlikely that the bullish reversal was underway. Rather, the upcoming bounce would likely just be a liquidity grab. To break the bearish structure, HYPE would have to climb beyond $21.5 and $24.95. Until then, the bearish bias in the medium term would remain.
The liquidation map revealed a cluster of high-leverage liquidation levels around the $14.84-region. It was relatively close to the price and had a decent amount of cumulative liquidation leverage. Since liquidity attracts prices, a short-term price bounce to $14.8-$15 is likely to occur over the weekend. Monday could see the gains wiped out and another move to the $12.1 support commence, and potentially fall lower.
The upcoming Federal Open Market Committee (FOMC) meeting has sparked significant anticipation within the cryptocurrency market. The meeting, scheduled for next week, follows recent data indicating a decline in US inflation to 2.8%. Market participants are closely monitoring the Federal Reserve's stance on interest rates, which could influence the volatility of the crypto market. Among the cryptocurrencies under scrutiny are Hyperliquid, which has experienced a massive loss due to the liquidation of an Ethereum whale. This event has shaken investor confidence in the platform, leading to a weak price performance for the HYPE token. The upcoming FOMC meeting is expected to exacerbate this decline.
