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The cryptocurrency market has once again turned its spotlight on Hyperliquid (HYPE), one of the most talked-about altcoins in recent months. After a 16% drop from its range highs, traders are debating whether the token still has more room to fall—or if this correction could present long-term investors with an undervalued entry point.
With HYPE oscillating within a wide trading range of $36–$50 throughout Q3, both short-term traders and long-term holders are watching the charts closely. The token recently rejected $50 in mid-August, paving the way for bears to lock in gains as prices retraced. But could there still be another profitable shorting opportunity ahead? Or is HYPE simply trading below its true value?
Price Rejection Signals Bearish Momentum
At the time of writing, HYPE was trading below the mid-range support of $42, a level that has historically served as a pivot point for bulls and bears. Losing this area increases the likelihood of the price moving further down toward the range lows around $36.
Technical indicators are strengthening the bearish case. The Relative Strength Index (RSI) has been trending lower, reflecting weakening momentum from buyers. At the same time, the On-Balance Volume (OBV) indicator shows declining inflows, which confirms that sellers are maintaining control.
The Supertrend indicator has also flashed a clear sell signal, reinforcing the bearish outlook. If HYPE continues to print daily closes below $42, it could pave the way for another 16% drop toward $36.
Liquidity Levels Could Drive Price Action
Liquidity maps suggest that price magnets are forming at key levels. On the downside, liquidity clusters exist at $40 and $37.3, both of which could attract further sell pressure. If price sweeps these lower levels, traders may see another wave of shorting opportunities before the market finds stability.
On the upside, liquidity pools remain concentrated around $45 and $50. These levels represent potential hurdles should buyers attempt a rebound. A strong recovery above $42 could force short sellers to exit, shifting momentum in favor of the bulls. However, until that happens, bears appear to have the upper hand.
Macro factors could also play a role. With investors awaiting commentary from U.S. Federal Reserve Chair Jerome Powell at the Jackson Hole Symposium, a hawkish stance on interest rates could weigh further on risk assets, including altcoins like HYPE.
Short-Term Bearish, Long-Term Opportunity?
While short-term technicals suggest weakness, the longer-term outlook for HYPE may tell a different story. The token currently shows signs of undervaluation based on the Supply Weighted Profit-to-Earnings (SWPE) ratio.
The SWPE compares HYPE’s market capitalization against its protocol earnings, providing insight into whether the asset is trading at a discount. A lower ratio often suggests that the token is undervalued relative to its fundamentals.
At present, HYPE’s SWPE ratio stands at 3.19—a level that analysts interpret as a potential bargain for long-term investors. Since protocol earnings also fund Hyperliquid’s token buyback program, stronger fundamentals could eventually support higher demand for HYPE once short-term volatility subsides.
Mixed Signals Keep Traders on Edge
The clash between technical weakness and fundamental strength has left the market divided. On one hand, traders focusing on price charts and liquidity sweeps see opportunities to profit from potential declines toward $36. On the other hand, value-oriented investors view the token as a discounted entry, supported by sustainable earnings and ongoing buybacks.
This mixed outlook is not unusual in crypto markets, where short-term volatility often overshadows long-term value. However, HYPE’s position within a well-defined trading range does provide clarity: traders can set clear levels for both shorting and buying opportunities depending on how the next moves unfold.
What Traders Should Watch Next
For short sellers, the key confirmation will come from whether HYPE can hold below $42. Sustained closes beneath this level would likely strengthen the case for another drop toward $36, offering up to 16% in potential downside gains.
For long-term spot buyers, the opportunity lies in whether HYPE continues to trade at a discount relative to its fundamentals. If the market stabilizes near the lower end of the range, investors could view it as an accumulation zone before the next leg higher.
Final Thoughts
Hyperliquid’s recent 16% pullback has opened up two distinct opportunities in the market. For short-term traders, a bearish continuation could yield further gains on the downside, particularly if macro conditions remain unfavorable. At the same time, long-term investors may see HYPE’s current valuation as attractive, backed by protocol earnings and a buyback mechanism that supports price sustainability.
In the end, the next move will likely hinge on whether the $42 mid-range is reclaimed or rejected. A breakout above this level could flip sentiment bullish, while a failure to hold may set the stage for another leg down to $36.
As always, traders and investors should weigh both technical and fundamental factors before making moves. With HYPE flashing mixed signals, caution and patience may be the most valuable strategies in the weeks ahead.
