Hyperliquid News Today: Bear Traps or Breakout HYPE's $38.9 Test Could Define Near-Term Fate

Hyperliquid (HYPE) faces intensifying bearish pressure as its price continues to decline amid a funding rate collapse to a six-month low. The altcoin, trading at $38.8 at the time of reporting, struggles to regain momentum following a recent market correction. Futures market sentiment has shifted decisively against the asset, with short positions dominating over longs, signaling widespread expectations of further price deterioration HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].

The funding rate-a metric reflecting the equilibrium between long and short positions in perpetual futures markets-has dropped to its lowest level since early 2024, underscoring heightened bearish conviction among traders. A negative funding rate indicates that short sellers are receiving payments from longs, a dynamic that amplifies downward pressure on HYPE's value. Analysts attribute this trend to a lack of confidence in near-term recovery, with futures traders actively positioning to profit from continued declines HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].

Technical analysis highlights conflicting signals from the Moving Average Convergence Divergence (MACD) indicator. While the MACD initially suggested potential for a bullish crossover-a scenario often interpreted as a reversal signal-the indicator has since retreated into negative territory. The growing divergence between MACD lines and price action reinforces expectations of further downside. Additionally, declining trading volume corroborates weakening buying interest, compounding concerns about the asset's near-term trajectory HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].

Price action analysis points to critical support levels that could dictate HYPE's immediate direction. Currently, the token hovers just below the $38.9 threshold, a key psychological level. If this support fails, prices could retreat to $36.7, with a subsequent breakdown potentially driving the token to $35.7. Conversely, a sustained rebound above $38.9 could trigger a test of the $40.2 resistance level. A decisive breakout beyond $43.5 would invalidate the bearish narrative and suggest a potential trend reversal HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].

Market participants are closely monitoring the interplay between futures positioning and on-chain metrics. The dominance of short positions in futures markets, combined with the MACD's bearish divergence, indicates that sellers hold a structural advantage. However, the absence of significant on-chain accumulation activity suggests that the current decline may lack the momentum to trigger a prolonged selloff. Traders are advised to monitor volume patterns and key resistance levels for signs of shifting market dynamics HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].

The broader market context remains cautiously bearish, with HYPE mirroring broader altcoin underperformance. Institutional sentiment appears aligned with the short-term bear case, though divergences in technical indicators caution against premature conclusions. Investors are urged to adopt a risk-managed approach, with stop-loss orders and position sizing critical to mitigating potential losses in a volatile environment HYPE Price Downtrend Deepens As Funding Rate Collapses To 6-Month Low^[1].