Hyperliquid Price News: HYPE Eyes Drop to $24 as Demand for Perps Declines

Hyperliquid (HYPE) has booked a 9% loss in the past 24 hours and has lost the $30 level as demand for perpetual futures and activity levels experienced a strong decline.

Trading volumes for this token surged by 152% during this period, currently accounting for 3% of the token’s circulating market cap.

Despite the drop, HYPE is the only token in the top 20 apart from Canton (CC) that has managed to keep its year-to-date performance in positive territory with a 4% gain.

Hyperliquid Traders Got Tricked by BTC’s ‘Dead Cat’ Bounce

The platform’s activity levels experienced a big surge in the first couple of weeks of February, as perpetual futures transactions spiked from 2.3 billion by the end of January to 7 billion during the second week of this month.

Perpetual Futures Transactions on Hyperliquid – Source: Artemis

This may have been the market’s response to a strong bounce in the price of Bitcoin (BTC) after it touched the $60,000 level. HYPE surged as activity levels spiked, moving from $22 to $38 in just 9 days.

However, as this apparent relief rally stalled just a few days later, traders were likely forced out of their positions.

The result was a strong drop in both open interest and perps transactions. Even though Hyperliquid remains the market leader among DEXs in the market for perps with a 27.5% share, on-chain data from Artemis shows that OI peaked during the week ended on January 18.

Open Interest (OI) on Hyperliquid – Source: Artemis

Since then, the metric has dropped from $9.5 billion to $4.4 billion as prices drop, and a significant volume of long positions were liquidated as a result.

HYPE Retreated Off $35 and Is Now Eyeing a Retest of the $24 Support

We can see that the $37-$35 level was the ceiling for the latest rally. Selling pressure increased significantly at those levels, right around where the 200-day exponential moving average (EMA) sat.

HYPE/USDT Daily Chart – Source: TradingView

The Relative Strength Index (RSI) has already turned bearish as it dropped below the 14-day moving average and the mid-line.

The next area of support to watch for HYPE would be $24, meaning a downside risk of 9% if the downtrend persists. Meanwhile, if those levels fail to hold, we could easily retest the $21 area, which would result in a higher 19% retreat from today’s price.

Sell Signal Confirms Bearish Short-Term Outlook

Heading to the 4-hour chart, a sell signal just popped up right after the Asian session kicked off. This signals system identifies “decisional” candles across multiple time frames. These are high-volume candles with a specific pattern and a clear directional bias.

HYPE/USDT 4H Chart – Source: TradingView

This sell signal increases the odds of a move to $24 significantly. Meanwhile, the RSI has already entered oversold levels in this lower time frame.

Hence, we might expect some buying that pushes HYPE to $28 in the next few hours. This would open up an interesting opportunity to short-sell the token at that level with a stop loss above $30 as a key psychological resistance.

This trade offers an appealing 2x risk-reward ratio and may get even better if the $24 support is broken.