Hyperliquid’s HYPE Hits Resistance That Last Preceded 65% Price Dip

HYPE, the native token of decentralized exchange Hyperliquid, has surged roughly 50% so far in May and was closing in on the $60 level on Thursday.

The same area, however, previously marked a major local top, preceding a 65% price crash. Can history repeat itself in the coming weeks or months? Let’s discuss.

Multiple Technical Setups Hint at HYPE Selloff Next

Since February, HYPE has been trending inside what appears to be an ascending parallel channel.

As of Thursday, the Hyperliquid token was approaching the channel’s upper boundary near the $60 mark.

Previous attempts to close above the said resistance have resulted in declines of approximately 20%–40%, raising the odds of HYPE entering a similar pullback stage in the coming days.

The token’s daily relative strength index (RSI) supports the downside outlook. As of Thursday, its reading was around a record 79, way above the overbought threshold of 70. That points to an overheated asset with limited upside left.

And then, the HYPE price is around the September 2025 resistance area that prompted a 65% correction to around $20.5. These three technical setups hint at a Hyperliquid price pullback in the coming days.

HYPE Short Squeeze Hints $60 Could Be Danger Zone

On Thursday, 98.17% of all leveraged liquidations across the platform came from short positions, creating a powerful feedback loop as forced buybacks accelerated the upside, according to data resource CoinGlass.

Open interest has climbed sharply (recently exceeding $1.9 billion in HYPE-related contracts), with funding rates flipping in ways that punished remaining bears.

This derivatives-driven momentum has propelled the ~50% May gain, and the push toward $60, but such squeezes are typically self-limiting.

Once the bulk of vulnerable short positions are cleared, the upward pressure often dissipates quickly, increasing the risk of a sharp reversal, especially at major technical resistance levels.

Whale Short Adds Fuel to HYPE’s Squeeze Risk

A large whale short position has become another key part of HYPE’s near-term setup.

According to on-chain tracker HypurrScan, trader loracle.hl is now down nearly $20 million on his HYPE short position, but has continued adding to the trade. The wallet reportedly holds a 1.71 million HYPE short, worth about $95.79 million, with a liquidation price near $69.78.

loracle.hl(@loraclexyz) is now down nearly $20M on his $HYPE short, but he is still adding to it.

He currently holds a 1.71M $HYPE($95.79M) short position, with a liquidation price of $69.78.https://t.co/Ts1Q50N4R9 pic.twitter.com/mT6Nn03mvF

— Lookonchain (@lookonchain) May 21, 2026

That matters because heavily underwater short positions can act like hidden upside fuel. If HYPE keeps rising toward the trader’s liquidation zone, forced buying may accelerate the rally further as the position gets squeezed.

A rally driven increasingly by forced short covering, rather than fresh spot demand, can reverse sharply once the biggest shorts are liquidated or forced to close.

In HYPE’s case, the $60–$70 area could either trigger one final squeeze higher or mark the exhaustion point before a deeper pullback begins.

How Low Can HYPE Price Go?

A correction from the $60-resistance-confluence brings the ascending channel’s lower boundary as the next potential downside target.

Previous pullbacks have led the price toward the channel support. Drawing a Fibonacci retracement graph to $20.5 swing low from $60 swing high brings the initial downside target near the 0.786 Fib line at around $50, down 12.5% from current prices.

A further dip below the channel’s lower trendline paves the way toward lower Fibonacci support lines, namely the 0.618 Fib level near $44, the 0.5 Fib level at around $40, and the 0.382 Fib level near $35.5.

Conversely, a break above the $60 resistance cluster may send the price rallying toward the 1.618 Fib line near $84, up roughly 40% from the current levels.

HYPE ETF Inflows Accelerate

US spot HYPE ETFs are showing signs of stronger demand, adding $25.46 million in daily net inflows on May 20, according to SoSoValue data.

That was the largest daily inflow since the products began trading earlier this month, lifting their total net assets to $58.73 million.

Daily inflows were modest, near $1 million–$4 million between May 12 and May 18, before rising to around $11 million on May 19 and then more than doubling on May 20. That suggests ETF buyers are increasingly chasing HYPE’s upside momentum.

Arkham Intelligence data shows a wallet linked to Galaxy Digital bought 158,100 HYPE, worth about $8.8 million, in two hours.

Separately, a newly created wallet withdrew 536,247 HYPE, worth roughly $29.87 million, from Coinbase over two days.

Together, the wallets accumulated or withdrew about 694,347 HYPE, valued at nearly $38.67 million. Such large withdrawals can reduce exchange supply and support prices.

Still, if HYPE fails to break above $60–$70, traders may view the whale buying as late-cycle demand absorbed near resistance.