Whales Step In as Hyperliquid Futures See Sharp Deleveraging

HYPE, the native token of decentralized perpetual exchange, Hyperliquid records a substantial loss of over 8.8% on Thursday. Following the release of U.S CPI data, and Bitcoin price reverting from $89,000 has bolstered the continued correction momentum in majority of major altcoins. While the falling Hyperliquid price signals a risk of prolonged downtrend ahead, latest on-chain data hints reversal opportunity as crypto whales show renewed accumulation trend.

• Hyperliquid price correction gives a sharp breakdown from the bottom trendline of a falling wedge pattern, signalling continued correction trend in near future.
• Open interest in HYPE futures contracts declined over 20% over the past week.
• On-chain data reveals notable USDC inflows into the Hyperliquid ecosystem during the pullback.

Hyperliquid Whales Position $37M in USDC as HYPE Price Pulls Back

On Thursday, December 18th, the crypto market witnessed a sharp sell-off along with Bitcoin price reverting to $86,000. The downswing accelerated following the US Consumer price index (CPI) data of 2.7%, lower than the expected 3.0%. While the softer print was expected to drive a bullish upswing in the crypto market, it surprisingly acted as a sell-the-news sentiment.

Along with weak price action, the open interest tied to HYPE futures contracts recorded a sharp decline. According to Coinglass data, the OI value has plunged from $1.62 Billion to $1.29 billion within a week, accounting for a 20% decline. This drop often signals that long positions are being closed out or liquidated en masse, removing the speculative force for price action.

While retailers remain cautious, On-chain tracking using Lookonchain shows large inflows of USDC into the Hyperliquid platform while the price pulled back down to around $24.

• An address with the beginning address 0x5Ae4 sent 20 million USDC and created limit orders for purchases at the $15 price point.
• A separate address, 0xE867, transferred 10 million USDC, adding to its current balance of 926,488 HYPE tokens, currently worth about 22.4 million dollars.
• Another address, 0x23Af, sent 7.1 million USDC securing 277,420 HYPE tokens at an average price of $25.6 each.

These transactions sum up to 37.1 million USDC deployed or positioned for HYPE buys suggesting sustained interest from big holders in the decentralized perp).

Hype Price Losses 100-day Support Amid Market Correction

Since last weekend, the Hyperliquid price has witnessed an aggressive correction from $29.9 to current trading price of $22.4, accounting for 24.9% loss. While a majority of major cryptocurrencies witnessed similar pullback, the Hype coin price got highlighted due to bearish breakdown below the formation of a falling-wedge pattern. 

Over the past 100 days, the coin price has resonated strictly within the two converging trendlines of the pattern as it offers dynamic support and resistance to traders. Thus, the recent breakdown below the bottom trendline highlights the aggressive nature of sellers to drive prolonged trendlines. The momentum indicator RSI dropped to 28% further accentuating bearish market momentum, reinforcing the risk of prolonged downtrend.

The price decline today offers a suitable follow-up to this breakdown. With sustained selling, the coin price could plunge another 16% before finding suitable support at $19.6.

On the contrary, if the coin price managed to reclaim the lower trendline as support, the buyers could regroup and attempt for renewed recovery in Hype price.

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