Hyperliquid (HYPE) Price Retrace after Security Concerns

After the tremendous airdrop campaign, the Hyperliquid (HYPE) token recently hit an all-time high before entering a correction phase. Its price chart reveals a classic corrective ABC structure following a significant five-wave impulse pattern. This blog dives into the factors influencing HYPE’s price, the technical analysis, and what the future might hold for this trending token.

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HYPE’s Corrective Phase Explained

After HYPE reached the peak of its five-wave structure, the token’s price sharply declined, marking the beginning of wave A. The current price action suggests a rebound attempt in wave B, with potential resistance zones near key Fibonacci retracement levels.

You can trade HYPE on spot on Kucoin, or perps on Bybit.

What Triggered the Drop in HYPE’s Price?

The correction coincided with major sell-offs by a notable whale, identified as Laurent Zeimes. Using Hyperliquid DEX’s TWAP mechanism, the whale sold over 175,000 tokens as part of a larger sell order exceeding 1 million HYPE tokens.

Concerns about the platform’s security heightened the bearish sentiment. Reports emerged of North Korean hackers testing vulnerabilities in Hyperliquid’s system. These revelations, shared by cybersecurity expert Tayvano, were particularly alarming due to Hyperliquid’s reliance on only four validators. Consequently, the platform witnessed over $42 million in USDC outflows, further pressuring HYPE’s price.

Technical Analysis: Understanding the Charts

Elliott Wave Insights
The price action aligns with the Elliott Wave theory, with wave 5 peaking at $35.20 before falling to $25. This movement respected the ascending channel’s support trendline, signaling its significance as a critical area.

Relative Strength Index (RSI)
The daily RSI suggested oversold conditions, leading to a brief recovery of 17% as the price climbed to $29. However, weakening bullish momentum during the rally hints at a potential continuation of the correction.

Key Fibonacci Levels
The 0.236 Fibonacci retracement level near $29.36 currently serves as short-term support. If the price breaks below this, the bullish structure could shift to bearish.

HYPE Price Prediction

The 15-minute chart indicates an ABC corrective structure is underway. Wave B may reach Fibonacci retracement levels of 0.5 or 0.618, targeting $30.15 or $31.31. If wave B completes as expected, wave C could bring a deeper retracement, with potential targets between $25 and $21.53, based on Fibonacci extensions.

Levels to Watch

Support Levels:

• $27.56 (0.236 Fibonacci retracement)
• $26.41 (0.382 Fibonacci retracement)
• $25.24 (previous low)
• $21.53 (1.0 Fibonacci extension of wave C)

Resistance Levels:

• $30.15 (0.5 Fibonacci retracement of wave B)
• $31.31 (0.618 Fibonacci retracement of wave B)
• $32.96 (0.786 Fibonacci retracement of wave B)

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I currently have bids at 25.8 and 22.5 for a scalp above $30.

Conclusion

HYPE’s price action reflects a classic corrective phase, driven by whale activity and external concerns. While short-term recoveries are possible, the bearish trend might persist unless key resistance levels are broken. Traders should watch Fibonacci retracement levels closely to navigate the market effectively.

Will HYPE reclaim its bullish momentum, or is the correction here to stay? The coming days will reveal the next chapter for this dynamic token.

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