Hyperliquid has emerged as one of the strongest performers in the cryptocurrency market. While Bitcoin is down about 28% and Ethereum is down about 40%, HYPE is up about 25% in the past month and about 10% in seven days. In the latest session, Hyperliquid’s price rose nearly 3%.
However, behind this outperformance, multiple technical and derivative indicators suggest that the rally may be losing its internal strength. The sustainability of the hyperliquid movement is currently under pressure due to a failed breakout, lower volumes, and increased leverage risk.
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Buying momentum weakens as sellers return
Despite recent price increases, spot market participation is beginning to wane.
On the daily chart, HYPE recently pushed towards the $36 zone but was unable to sustain the bull flag breakout. The latest candlestick shows a long top around this level, indicating active intervention by sellers. This rejection indicates an increase in supply (sellers) at a higher price.
At the same time, on-balance volume (OBV) has been on the decline from January 28 to February 5, even though prices continue to rise. OBV is a volume-based indicator that tracks buying and selling pressure.
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This divergence suggests that there are fewer spot buyers supporting the rally. Simply put, prices are rising, but real demand is falling. The momentum indicator flashes a similar warning.
From January 28th to February 4th, hyperliquid prices formed further highs, while the Relative Strength Index (RSI), a momentum indicator, recorded lower highs. Sellers took control on this bearish break, and the price subsequently fell towards $31 before buyers returned.
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Similar structures are now forming again. The price is about to rise, but the RSI does not confirm the move and is forming another low. This difference has not yet been fully confirmed. However, if the next daily candle falls below $36, the pattern is validated.
When a bearish OBV coincides with a bearish RSI divergence and repeated rejection near resistance, it often indicates that the upward momentum is slowing.
Derivatives positioning is heavily tilted towards long
While spot purchases are weakening, leverage exposure is moving in the opposite direction.
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Bybit’s data alone shows that the long position in HYPE Perpetual Contracts is nearly $17.1 million, while the short position is still around $10.7 million. This represents about a 60% bias towards longs. Such an arrangement creates structural weakness.
If most traders are in the same position, even a small correction can trigger a forced liquidation. These liquidations accelerate selling pressure and often turn small pullbacks into deeper declines. This risk is amplified by current technology settings.
If a bearish RSI divergence develops and price begins to break below resistance, overleveraged long positions may be out of the question. Cryptocurrency markets have repeatedly shown that long and heavy environments are prone to sudden downside cascades.
In HyperLiquid’s case, momentum is weakening while leverage is rising, making for a volatile combination.
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Ultra-liquid price levels to track now
All technical and derivative signals converge around some key levels. On the upside, Hyperliquid (HYPE) first needs to recoup $37 on a continuing daily closing price basis. A full breakout above this level will invalidate the current weakness and restore bullish momentum.
If $37 is regained, the next resistance level will be near $42. A clearing of this zone will strengthen the trend based on the Fibonacci extension and upside predictions, paving the way back to the $60-$64 area.
However, downside risks remain significant. The $28 level is currently the most important structural support.
According to the HYPE/USDT liquidation map, a daily close below $28 will likely weaken the bullish structure and trigger a widespread extended liquidation. In that scenario, the price could quickly slide towards the $21 area where deeper support is located.
Given the combination of declining volume, bearish momentum signals, and long-heavy positions, $28 is the dividing line between continuation and breakdown in hyperliquid prices.
