Hyperliquid (HYPE) has jumped by 1.5% in the past 24 hours shortly after hitting a key support area at $75.
This could mark the beginning of a recovery for the token after spending more than a month in correction mode.
The market is bracing for what could be a volatile week as the Federal Open Market Committee (FOMC) will convene on Monday to decide on interest rates.
The prevailing view is that no changes will be made to the federal funds rate this time, even though inflation levels rose last month according to the Consumer Price Index (CPI) and Producer Price Index (PPI).
Meanwhile, the price of oil continues to sit above $100, as there seems to be no end in sight for the U.S. war with Iran.
Odds of a rate hike currently sit at 9% according to data from FedWatch, but more than three-quarters of analysts surveyed believe that a rate hike is imminent in December.
This 45-day period could give the crypto market some breathing room and allow prices to recover after the strong correction that started in late September.
Rising Volumes on HIP-3 Could Help Keep HYPE Afloat Despite Crypto’s Retreat
Looking at on-chain data, open interest (OI) within the Hyperliquid blockchain has dropped by 11% since its recent peak on September 13 at $9.1 billion.
However, we have seen a milder decline in the past couple of weeks within the HIP-3 market, which is the blockchain’s purpose-built environment that hosts tokenized assets such as stocks and commodities.
Trading volumes for this market jumped strongly in mid-October, surging from $12.4 billion during the week ending October 4 to $19.6 billion a week later for a 58% spike.
HIP-3 activity has helped the Hyperliquid blockchain mitigate the impact of cryptos’ bear market and has contributed to the HYPE token’s stellar performance this year.
As adoption of blockchain technology among the trading industry continues to rise, Hyperliquid is uniquely positioned to capitalize on this trend and this is the reason why we are still bullish on this token in the long term and see this latest correction as a chance to grab some HYPE at a decent price.
HYPE Needs to Break Past $83 to Confirm Trend Reversal
Turning to the daily chart, we can see that the latest price action confirms that there’s strong demand for HYPE at $75.
This level acted as a bouncing pad in mid-September, and the token rose to its current all-time highs just a couple of weeks after hitting it.
However, to confirm that this is truly the beginning of a recovery, the price would have to rise past $83, as this would confirm a trend reversal.
HYPE’s short-term outlook will remain bullish unless this $75 area is broken. Meanwhile, if the price action drops below this mark, the next area of support to watch would be the 200-day exponential moving average (EMA) at $67.5.
The Relative Strength Index (RSI) remains bearish at 39, indicating that sellers remain in control. However, the oscillator is about to rise above the signal line.
Paired with a strong bounce off a key support, this could further confirm a shift in the price trend and set the stage for a recovery to a near-term target of $89 at least.