Hyperliquid (HYPE), a rising star in the digital asset space, recently hit a new all-time high of $44, riding on months of steady accumulation, whale activity, and increased institutional attention. However, after the broader crypto market took a downturn—partly due to Bitcoin pulling back from its $111K mark—HYPE experienced a minor retracement, leaving investors wondering whether the correction is temporary or a signal of a deeper pullback.

Despite this short-term dip, HYPE remains one of the stronger performers in the altcoin market. Technical analysis suggests that the dip may be nothing more than a pause in an ongoing uptrend. The asset is currently retracing towards key support levels at $38.3, $36.95, and $35, according to Fibonacci retracement tools. These zones could serve as springboards for the next leg up if bulls regain control.

The three-day chart shows that HYPE continues to maintain a bullish market structure. The price had broken through a previous high near $27.2, and successfully retested that zone as a demand area before surging by 48% within just 24 days. This strong price action is a clear sign that buyers are still in control of the larger trend. However, as prices moved higher, trading volumes started to taper off, indicating a possible exhaustion of momentum. The 20-day moving average of volume also declined, typically a warning sign in a sustained rally.

Another bearish signal appeared on the three-day Relative Strength Index (RSI), which has been forming lower highs even as the price has posted higher ones—a classic case of bearish divergence. This points to weakening momentum, increasing the probability of a short-term correction or consolidation phase before the uptrend resumes.

On the four-hour timeframe, the market structure remains bullish, though momentum has cooled. The RSI has dropped toward the neutral zone, suggesting neither buyers nor sellers currently have a strong edge. Encouragingly, the On-Balance Volume (OBV) metric has not shown any significant selling pressure yet, which means investors are not rushing to exit their positions.

The fundamentals behind HYPE’s rise remain intact. Institutional activity is on the rise, with whales continuing to accumulate. The 90-day Taker Cumulative Volume Delta (CVD), a metric that tracks aggressive buyer behavior, is showing strong positive movement. This means that buyers are still stepping in at market prices—an encouraging sign for future gains.

Exchange data further confirms the bullish sentiment. There has been a consistent trend of outflows exceeding inflows, suggesting that holders are moving their HYPE tokens into cold storage, reducing available supply on centralized exchanges. This is often a precursor to bullish price action, as reduced liquidity on exchanges can push prices higher when demand kicks in.

User activity on the network is also improving, with a 15.9% rise in active addresses and an 8.9% increase in new address creation over the past week. These increases indicate that more users are engaging with the Hyperliquid ecosystem, adding a layer of fundamental strength to the asset’s price performance.

While a deeper retracement is possible if Bitcoin continues its correction, the overall trend for HYPE remains bullish. The current consolidation phase appears to be healthy and may serve to shake out weak hands before a renewed rally. As long as the price holds above the key support zones and buyer activity remains strong, HYPE is likely to retest its all-time high and possibly break above it.

In summary, Hyperliquid is navigating a period of short-term price weakness, but its long-term uptrend looks intact. Supported by rising institutional interest, a tightening supply on exchanges, and increasing user engagement, the stage appears set for a continuation of the bullish trend—possibly taking the token toward the $50 mark and beyond in the coming weeks.