Hyperliquid (HYPE) has recently dropped below a critical support level, causing widespread concern among investors. The breakdown signals that the token could be heading for a further decline, with analysts predicting a potential drop to $13 if bearish pressure continues. As the market sentiment turns increasingly negative, traders are evaluating the chances of a rebound versus further losses.

HYPE’s Struggles and Bearish Price Action

HYPE recently broke through an important support level at $22.70, triggering alarm bells in the market. This breakdown followed a breakdown from a symmetrical triangle pattern, which had many speculating about a significant price fall. The price of HYPE is now hovering around $21.50, marking a sharp 12% decline in just a 24-hour period.

This drop has been accompanied by a surge in trading volume, which rose by 95%. Such an increase suggests heightened market activity, driven in part by the liquidation of long positions. However, this surge may also indicate that some traders are looking to accumulate more HYPE, further complicating the market’s outlook. Despite the volatility, the overall trend appears to be pointing downward.

Technical Indicators Point to More Declines

According to AMBCrypto’s analysis, if HYPE closes below $22.50 on a daily chart, the price could experience a 14% drop, which would push the value to around $19 in the coming days. Such a drop is within reach, especially considering the current market conditions. The breakdown of both key support levels and the symmetrical price pattern reinforces this bearish outlook.

HYPE’s Average Directional Index (ADX), which measures the strength of the trend, is currently sitting at a low 11.20. This low ADX reading indicates weak momentum, which may help explain why the token continues to face downward pressure. The lack of a strong bullish trend suggests that any reversal will be difficult unless external factors shift the market sentiment.

Analyst Predictions Suggest $13 Price Target

One prominent crypto analyst has predicted that HYPE could eventually fall to $13 if the symmetrical triangle pattern breaks further. This prediction aligns with AMBCrypto’s analysis, which also points to a potential drop below the $19 level if the bearish trend persists. With both technical and sentiment indicators pointing to continued weakness, it’s clear that market participants are bracing for further downside.

While the $13 price target is based on current market conditions, it’s important to note that cryptocurrency markets are notoriously volatile. Unforeseen developments or a sudden shift in sentiment could alter the token’s trajectory. For now, though, bearish predictions are driving the outlook.

Over-Leveraged Positions Fuel Bearish Momentum

One key factor contributing to HYPE’s current decline is the presence of over-leveraged traders. According to data from the HYPE Exchange Liquidation Map, the price levels at $21.17 (support) and $22.79 (resistance) are crucial in determining the next direction for the token. Traders have built a significant number of short positions ($2.90 million) compared to long positions ($415k), which suggests that short sellers currently hold the upper hand.

The imbalance between long and short positions, along with the over-leveraged positions, could exacerbate the price drop. If the price falls further, more long positions may be liquidated, creating additional selling pressure and pushing the price lower.

Market Sentiment and Future Outlook for HYPE

Looking ahead, HYPE is likely to continue experiencing heightened volatility as traders react to both technical indicators and broader market conditions. The current sentiment remains bearish, with the likelihood of further declines if key support levels continue to hold. If the token drops below $19, as predicted, a subsequent move to $13 could be in the cards.

That said, HYPE’s future is far from certain. While short-term traders are clearly in control, market conditions can shift rapidly, and unforeseen events could trigger a change in sentiment. For now, traders should remain cautious and monitor support and resistance levels to determine the next potential move.

In conclusion, Hyperliquid is currently struggling below key support levels, and analysts predict the price could drop to $13 if bearish momentum continues. With over-leveraged positions dominating the market and weak trend strength, the outlook remains bleak. Investors should watch closely for signs of stabilization or further declines in the coming days.