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Hyperliquid (HYPE), the altcoin that captured market attention with its explosive rise, has recently cooled off after hitting a new all-time high. Despite dropping nearly 10% from its peak, signs point to strong bullish activity under the surface, hinting that the recent dip might only be a pause before another potential surge.
HYPE’s Meteoric Rise and Sudden Pullback
Since mid-April, HYPE has become one of the standout altcoins of the season. From a low of $9.28, it rocketed to an impressive $37.60, delivering over 80% gains in just one month. This surge naturally attracted many traders looking to capitalize on a possible post-peak cooldown.
As is common after such sharp moves, short sellers piled in expecting the price to correct. However, the market’s reaction surprised many. In the last 24 hours alone, over $23 million worth of short positions were liquidated, with nearly $858,000 in long positions wiped out as well. This liquidation indicates strong bullish momentum pushing back against bearish bets.
Overheating Signals and Market Volatility
Despite this, caution is warranted. On-chain data reveals classic overheating signs—like an overbought Relative Strength Index (RSI)—and increased volatility across the broader market. These factors often signal that a retracement or consolidation phase could be on the horizon.
This dynamic creates a tense tug-of-war between bulls and bears. If buyers can maintain their grip and continue accumulating HYPE on the spot market, they may force shorts to capitulate again, triggering another potential short squeeze.
Why Bulls Still Hold an Edge
Even after the recent price dip to about $33.30, HYPE demonstrated resilience, bouncing back with a 5% intraday gain shortly after. Meanwhile, open interest in HYPE futures declined by 3.36% to $1.21 billion, indicating that traders are reducing leverage and easing pressure in derivatives markets.
This combination suggests that while some traders are taking profits or stepping back, there’s ongoing demand at the spot level, quietly building a base for a possible next rally.
Key Levels to Watch for HYPE’s Next Move
The critical price point to watch is near $35.50. According to CoinGlass data, nearly $20 million in leveraged positions could be at risk if HYPE breaks above this level. Such a move would likely trigger forced liquidations, fueling a rapid price surge.
If on-chain accumulation keeps pace and macroeconomic conditions stabilize, HYPE could be setting the stage for another run at a new all-time high.
What This Means for Traders and Investors
HYPE’s recent price action is a reminder of the complex interplay between momentum, leverage, and market sentiment. The altcoin’s volatile swings offer opportunities but require careful risk management.
For now, the bulls seem ready to defend their territory, but a lot depends on whether demand can absorb ongoing sell pressure. Should the bulls maintain control, HYPE might rewrite its story with fresh gains. Otherwise, the bears may gain ground, leading to deeper corrections.
Conclusion
HYPE’s 9% pullback from its record high is not necessarily a sign of a sustained downturn. Instead, it reflects natural market dynamics after a rapid rally. With strong on-chain accumulation, declining leverage, and significant liquidation of short positions, the conditions are ripe for a possible renewed surge. Traders should watch key levels closely as HYPE navigates this critical phase.
