Market Overview
- •HYPE trades near $41 with mounting selling pressure and visible technical weakness.
- •A head and shoulders setup suggests potential for a major downward move toward $20.
- •Market activity, token unlocks, and sentiment indicate mixed confidence in short-term recovery.
Hyperliquid (HYPE) is exhibiting new stress symptoms with its market structure becoming weakened. Traders will be following one of the significant support areas that will help decide whether the asset will stabilize or whether the corrective action will be even stronger in the coming days.
Technical Setup Indicates a Bearish Structure
Hyperliquid’s daily chart now shows what could be a developing head and shoulders formation, often seen as a reversal signal following a prolonged uptrend. The left shoulder took shape in August, the head peaked around mid-September, and the right shoulder has been rounding off through October.
A tweet from analyst Ali (@ali_charts) drew attention to the structure, noting that “Hyperliquid $HYPE could be forming a head and shoulders pattern. If confirmed, it projects a move to $20.” This observation has gained traction among traders, who now see the neckline between $38 and $39 as the critical dividing line for the next price direction.
The technical projection on strength based on height between the neckline and the head gives potential downside targets at the range of 20-22. This point overlaps the 1.618 Fibonacci extension zone, and a successful breakdown may change the momentum faster towards that area.
Rising Volume and Token Dynamics Drive Market Focus
While price weakness has emerged, trading activity has risen considerably. In the past 24 hours, the volume increased 39% to $472 million, a positive indication of more liquidity providers as well as short-term traders. Nevertheless, this improvement in volume has not carried over to purchasing power, meaning that a significant part of the present action could be defensive positioning.
Meanwhile, Hyperliquid’s circulating supply of 336.68 million HYPE compared to the total supply of 999.53 million implies current risks of supply growth. The unlocked market cap of 12.72 billion and the fully diluted valuation (FDV) of 41.14 billion reflect the size of tokens that are yet to be released, which may affect price stability in case of a slowing demand.
These numbers indicate that the market is still very delicate to future unlocking schedules of tokens. Investors are watching carefully for any changes that could shift liquidity conditions, as increased supply could amplify volatility near key technical zones.
Sentiment Remains Divided Despite Long-Term Confidence
Community perception of Hyperliquid remains mixed. Some traders express caution over the weakening technical picture, while others emphasize the project’s solid fundamentals and design principles. Commentator CryptoBull recently wrote that “$HYPE is what an alt/btc chart should look like. It’s what happens when you combine the two things crypto lacks most: high ethical standards and product-market fit.”
Short-term sentiment is weak, in spite of this confidence. The $40 area is a psychological indicator, and any daily decline below the area may attract additional declines to $35. On the other hand, recovery of over $43-$45 may indicate accumulation again, negating the bearish pattern and the initiation of a relief rally.
For now, the balance between technical weakness and community conviction defines Hyperliquid’s near-term outlook. As the head and shoulders pattern nears confirmation, market participants are watching whether bulls can defend the neckline or face a larger retracement toward lower valuation zones.