Hyperliquid (HYPE) has managed to surpass $19.2, breaking out after an 11-day consolidation beneath that level. However, a series of bearish technical indicators and on-chain activity raises doubts about whether the cryptocurrency will continue to climb, with $22 appearing to be a challenging target in the short term.

The Breakout and Bearish Divergence

After spending over a week below $19.2, HYPE’s price action finally managed to break above that level, flipping it from resistance to support. This breakout, however, came with cautionary signals in the form of bearish divergence, as suggested by the momentum indicators. The divergence pointed to the possibility of a pullback or further consolidation around the $19.2 level, suggesting that the rally might lose steam before pushing to higher levels.

Despite these signals, HYPE managed to outperform the popular blockchain TRON (TRX) in terms of daily fees, with Hyperliquid generating $2 million in fees compared to TRON’s $1.9 million during the same 24-hour period. This surge in on-chain activity helped explain the notable fee gap between the two assets, giving credence to the idea that the token could continue to perform well if the bullish sentiment prevails.

Fibonacci Analysis and Price Targets

Looking at the technical analysis, the price target for Hyperliquid is influenced by Fibonacci retracement and extension levels. After a drop from $17.34 to $9.29, analysts applied Fibonacci levels to understand potential support and resistance zones. Over the past two weeks, HYPE has consolidated below the $19.24 mark, which coincides with the 23.6% Fibonacci extension level.

While consolidation periods typically indicate indecision in the market, a notable increase in the Chaikin Money Flow (CMF) to +0.28 and the Accumulation/Distribution (A/D) line’s upward movement signaled that there was still some bullish sentiment among traders. These indicators, when paired with the breakout on Wednesday, seemed to quell some of the concerns about the potential for a sharp decline.

However, there are signs of concern. The Relative Strength Index (RSI) has made a lower high, despite the price of HYPE making a higher high in recent days. This classic case of bearish divergence hints that there may be some short-term downward pressure, potentially testing the newly established support at $19.24 once again.

Liquidity and Liquidation Levels

On-chain data, including the 3-month liquidation heatmap, also suggests that $22 is a key price target for Hyperliquid. A significant cluster of liquidation levels is positioned around $21.35 to $22.3, with $22.3 aligning with the 61.8% Fibonacci extension level, making it an attractive target for swing traders looking to capitalize on price moves.

However, the 2-week liquidation heatmap indicates that a move toward $22 may not be straightforward. The liquidity cluster at $20.4 is considered a “magnetic zone,” meaning that HYPE will likely need more accumulation and liquidation activity before testing this level. Currently, there is a stronger concentration of liquidity around $19.45, suggesting that this region could continue to attract traders and act as a buffer before any potential rally.

Outlook: Consolidation or Rally?

Given the presence of bearish divergence on the 4-hour chart and the consolidation around $19.2, it seems likely that HYPE will continue to trade sideways or consolidate at these levels in the near future. However, if the momentum indicators turn positive again and the support at $19.24 holds, there’s potential for a breakout toward $22 in the coming weeks.

The key levels to watch are the $19.2 support and the $20.4 liquidity zone, as these will indicate the direction of the next major move. If the price can break through these levels, the rally to $22 becomes a more probable scenario. But if the bearish divergence plays out, HYPE may need more time to accumulate before any further upward movement can be expected.

In conclusion, while the recent breakout above $19.2 is a promising sign for Hyperliquid, traders should remain cautious of the bearish divergence and potential consolidation. A move toward $22 is possible, but it will depend on how the market reacts to the current technical setup and on-chain metrics.