The native Token of Hyperliquid, HYPE, is showing signs of weakness after the recent strong fluctuations in the market. After several unsuccessful attempts to bounce back, this altcoin is struggling to maintain its position at important support levels.
Although short-term investors still hope for a bounce back, technical indicators suggest that traders setting long orders should be cautious of potential risks.
Risk of Loss for HYPE Traders
According to the liquidation map, if the price of HYPE drops to the important support level of 35.3 USD this month, long positions could face the risk of liquidation of up to 24.40 million USD. This is a significant risk that could lead to a wave of mass position closures among leveraged traders.
Notably, this price level has been tested twice in the past month. If it continues to be tested for the third time, market confidence may be severely undermined, limiting new capital flow into long positions, making HYPE vulnerable to strong fluctuations and increasing downward pressure.
HYPE liquidation map | Source; CoinglassThe MACD indicator is currently giving an early warning signal of a strong bearish trend.
The bearish crossover has just appeared on the MACD, indicating that selling pressure may continue to persist. Although the current downtrend is not too severe, if market confidence continues to weaken, the level of losses could increase rapidly.
In the context of the overall market sentiment for cryptocurrencies deteriorating, HYPE will struggle to maintain its current trading price range. A deeper downtrend may prolong the bounce back process, forcing many traders to withdraw before the market shows signs of improvement.
HYPE's MACD index | Source: TradingViewConversely, if Bitcoin and other altcoins stabilize again, selling pressure on HYPE may be alleviated.
HYPE price is at risk of dropping to the support level
Currently, HYPE is trading at 39.9 USD, fluctuating within a narrow range from 42.4 USD to 38.4 USD. The potential for a price breakout remains quite limited unless market sentiment improves significantly and buying pressure returns.
If the downtrend continues, HYPE may lose the support level of 38.4 USD and once again test the mark of 35.3 USD. Breaking this level could trigger a wave of liquidations of long positions worth millions of USD, increasing the downward pressure and prolonging the bounce back.
HYPE price analysis | Source: TradingViewConversely, if positive momentum is solidified and investors return to support, HYPE may attempt to break through the resistance level of 42.2 USD. If successful in converting this threshold into support, the altcoin could move towards the 47.1 USD mark, eliminating negative prospects and sparking new optimism within the trading community.
Mr. Teacher
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