Hyperliquid Surges 35% After Market Downturn

Hyperliquid, a prominent player in the digital asset space, experienced a significant rebound after a period of market-wide selling. On March 7, the asset's value plummeted to $9.29, reflecting the broader market downturn. However, within a single day of hitting this low, Hyperliquid surged by 35%, demonstrating a remarkable recovery. This swift turnaround highlights the asset's resilience and the potential for rapid value appreciation in the digital asset market.

The recovery can be attributed to several factors, including investor confidence in the asset's long-term prospects and the overall market sentiment shifting in favor of digital assets. This event underscores the volatility and dynamic nature of the digital asset market, where assets can experience dramatic fluctuations in value over short periods. The recovery of Hyperliquid serves as a reminder of the importance of strategic investment and the potential for significant gains in the digital asset space.

Despite the 35% bounce, the technical indicators on the lower timeframe (4-hour) shifted bullishly, but other clues showed bearishness. The market structure on both the 1-day and 4-hour charts was bearish, outlining a key resistance level for HYPE bulls to overcome in the coming days to enforce a recovery. HYPE bulls need to reclaim $12, but this is a significant challenge given the current market conditions.

In March, Hyperliquid bulls successfully defended the $12 level, even during its second retest. By the final week of March, a range formation and consolidation seemed likely. However, fearful market conditions shifted expectations. HYPE dropped below $12 to test $10, strengthening the bearish bias. This bearish trend had been evident since February, as the On-Balance Volume (OBV) showed a consistent downtrend, indicating steady selling pressure.

The Awesome Oscillator also highlighted six weeks of downward momentum. At press time, a retest of $12 as resistance appeared likely, potentially leading to a move toward $8.2, the next Fibonacci extension level. The 4-hour chart showed a descending channel formation in the past two weeks. At press time, the high of the channel had forced HYPE prices to falter. This was a disappointment to the bulls, who expected a breakout based on the OBV’s movement.

The OBV set a new high compared to the past ten days. The Awesome Oscillator also poked its head above the zero line to indicate bullish momentum after the bounce from the channel’s low at $9.54. Since the higher timeframe bias was bearish, and the $12 level was a key resistance level, it was likely that Hyperliquid would fall to the $11.2 support zone next. The mid-level of the channel was also a promising dynamic support.