Hyperliquid Bounces Off Key Level with Strong Volumes – HYPE Back at $50 Soon?

Hyperliquid (HYPE) defied the market’s gravity yesterday as it recovered strongly upon hitting a key support at $40 per token.

Trading volumes in the past 24 hours remain close to $1 billion, accounting for 6.6% of the asset’s circulating market cap.

The past two weeks have put trading platforms under stress. Whenever that happens, and Hyperliquid manages to survive the carnage, it gives it a credibility boost.

The token has experienced a 14% jump in the past 24 hours alone and currently sits at $41.7. Based on technical readings, it could jump back to $50 in no time if this wave of positive momentum continues.

It is currently the top-performing crypto in the top 5 in terms of 24-hour gains, emphasizing the market’s outsized interest in HYPE compared to other altcoins.

Hyperliquid and Aster Compete for the Lead in the Perps Market

Recently, Hyperliquid has faced intense competition from Aster, a BNB-native perps trading platform that quickly rose to popularity. The former CEO of Binance, Changpeng Zhao, claimed to have invested $2 million in ASTER, giving the latter a huge credibility boost.

Data from CoinMarketCap shows that Hyperliquid’s market share in the perps market among decentralized exchanges stands at 25% compared to 19% for Aster.

Decentralized Exchanges Ranked by 24H Volume (Futures) – Source: CoinMarketCap

Nonetheless, there have been instances when Aster has surpassed Hyperliquid in this specific metric, even though the latter has always maintained the lead when it comes to open interest (OI).

A well-reputed platform like DeFi Llama recently voiced its concerns about Aster’s volumes amid the protocol’s lack of transparency when it comes to reporting its on-chain activity.

Meanwhile, Hyperliquid is both fully decentralized and transparent as the protocol runs in its own layer-one blockchain rather than relying on an L1 like BNB Chain or Ethereum, as Aster does.

Competition in the perps trading market seems to be heating up, and Hyperliquid needs to make sure that it will continue to deliver its best to stay in the lead.

HYPE Could Hit $58 as 200D EMA Cushions The Pullback

The daily chart shows a major area of confluence that is acting as support for Hyperliquid. The $39 level coincides with the 200-day exponential moving average (EMA) and a former trend line resistance.

HYPE/USD Daily Chart (Bitget) – Source: TradingView

This is a relevant retest area for a major breakout that took place in late October as HYPE rose to $47. Hence, we could expect that the token will bounce strongly off this mark and continue its way upward to $50 as long as bullish momentum continues.

The Relative Strength Index (RSI) had dropped below the 14-day moving average, so there’s still a risk that HYPE could lose this support. Nonetheless, the odds favor bulls, and the upside potential, if we set a realistic target at $57, is quite attractive at 36%.

The first stop along the way would be $48. That would already secure a 14% gain in the near term. There’s a ton of internal liquidity at that level (candle wicks) and this should act as a magnet to draw the price to that level.

HYPE/USD Hourly Chart (Bitget) – Source: TradingView

Looking at the hourly chart, we can define a tactical approach for a short-term trade. Traders could wait for a confirmed breakout above $43, and then set their long positions at that level with a stop loss right below that mark, as this should be the market’s pivot for its next move to $48.

This trade would offer a $4:1 risk-reward ratio. The RSI in this lower time frame already confirmed that bullish momentum is picking up steam, so this could be a good setup if HYPE’s uptrend keeps going.