Home Altcoins News Hyperliquid (HYPE) Drops 5%, Market Cap Below $7B

Hyperliquid (HYPE) Drops 5%, Market Cap Below $7B

Hype price

The price of Hyperliquid (HYPE) has witnessed a decline of 5% in the past 24 hours, contributing to a broader drop of 15% over the last seven days. This recent dip has led to Hyperliquid’s market capitalization falling below the $7 billion mark, pushing the asset down to the 25th position in the cryptocurrency rankings. This downward movement is exacerbated by growing concerns surrounding the project’s transparency and its level of centralization, which have raised alarm bells among some investors.

Despite the ongoing downtrend, technical analysis is showing contrasting signals. On one hand, the Directional Movement Index (DMI) indicates that bearish momentum is intensifying, while the BBTrend shows positive signs, hinting at the potential for stabilization and a reversal if buying pressure increases. The market’s reaction in the coming days will likely depend on whether investor confidence is restored and if Hyperliquid can resolve its issues of transparency and centralization concerns.

Bearish Sentiment Grows Stronger

A closer look at the Average Directional Index (ADX) reveals a strengthening downtrend for HYPE. The ADX, a key indicator used to gauge the strength of a trend, has surged from 12.6 on January 7 to 27.5 by January 9. This increase in ADX suggests a more pronounced bearish trend, as readings above 25 indicate that the trend has gathered significant momentum. Additionally, the +DI, which represents buying pressure, has sharply fallen from 24.3 to 10.9, signaling weakening bullish sentiment.

In contrast, the -DI, which tracks selling pressure, has surged from 18.1 to 30.9, confirming that the bears are firmly in control. This shift in momentum suggests that Hyperliquid may continue to face downward pressure unless there is a significant reversal in buying activity. The combination of these technical indicators paints a concerning picture for the asset in the short term, implying that further downside could be on the horizon if market sentiment does not improve.

BBTrend Offers Glimmer of Hope

Despite the bearish signals, the BBTrend indicator for Hyperliquid has shown positive movement. The BBTrend, which measures trend strength and direction based on Bollinger Bands, has risen from a negative value of -14.7 in late December to 5.9 by January 9. This upward shift indicates that the selling pressure may be easing, offering some hope for a potential price stabilization or reversal.

Although Hyperliquid remains in a downtrend, the positive movement in BBTrend suggests that a change in momentum could occur if buying pressure continues to build. For now, the improvement in BBTrend may indicate a glimmer of hope, but it is too early to determine whether this trend will be sustained.

HYPE Price Outlook and Potential Recovery

Looking ahead, Hyperliquid’s price faces significant challenges. Its Total Value Locked (TVL) has dropped to a year-low, and the short-term Exponential Moving Average (EMA) has crossed below its long-term counterpart, reinforcing the bearish outlook. If the downtrend continues, $14.99 could become a crucial support level. Should this level fail to hold, the price may fall further, with $12 identified as the next major support, signaling a potential 40% drop from current levels.

However, if the market sentiment shifts, Hyperliquid could test the resistance at $22, and a breakout beyond this level could propel the asset to higher targets of $29 or $30. Such a rally could help Hyperliquid regain its position among the top 20 cryptocurrencies, returning to the levels it maintained during December 2024.

Conclusion

Hyperliquid (HYPE) faces a critical juncture as its market cap dips below $7 billion and its price continues to struggle. While bearish indicators dominate in the short term, the positive movement in BBTrend offers a slight hope for a rebound. The ability of the asset to recover will depend on overcoming its internal challenges and whether market confidence is restored. Only time will tell if Hyperliquid can reverse its fortunes and regain upward momentum.

Read more about:
Share on

Evie

Evie is a blogger by choice. She loves to discover the world around her. She likes to share her discoveries, experiences and express herself through her blogs.

Crypto newsletter

Get the latest Crypto & Blockchain News in your inbox.

By clicking Subscribe, you agree to our Privacy Policy.

Get the latest updates from our Telegram channel.

Telegram Icon Join Now ×