Hyperliquid whale loses out as HYPE drops – Will price keep falling?

• Whale faces a $1.39M loss as HYPE struggles near key support levels.
• Technical indicators and liquidation heatmaps suggest further downside risk if support breaks.

A whale recently deposited $600k USDC into Hyperliquid’s [HYPE] market to strengthen its position in HYPE.

This whale spent a massive $7.01M to acquire over 362,000 HYPE tokens, purchasing them at an average price of $19.34. 

However, the market has taken a downturn, with the whale now facing a $1.39M loss.

This raises questions about the whale’s strategy and whether the recent purchase will pay off in the long run, or if it signals further risk in the market.

HYPE price action analysis

The price was consolidating near the key $15.00 support level at press time, forming a falling wedge pattern. At press time, HYPE was trading at $15.13, marking a 4.12% decrease over the past 24 hours.

Historically, such patterns can lead to bullish reversals when the price reaches the lower boundary. If HYPE manages to hold above $15.00, a rebound toward the $16.50 resistance could be in store. 

However, if the support breaks down, the next significant support level lies around $14.50, opening the door for potential further declines.

Source: TradingView

Do the charts confirm a potential reversal?

Looking at the Relative Strength Index (RSI), the press time value of 39.67 suggested that HYPE was approaching oversold conditions.

This could be a sign that a reversal is imminent, as oversold assets often bounce back. 

Additionally, the RSI has not yet reached the critical 30 mark, indicating that the bearish momentum may not be fully exhausted.

The MACD has been showing a slight bearish divergence with the blue line above the orange line, signaling ongoing selling pressure.

Source: TradingView

What do the liquidations say about market sentiment?

The liquidation heatmap for HYPE revealed that several liquidation clusters are forming around the $15.00 level.

This is a significant area of interest, as traders with leveraged positions may face liquidation if the price drops further. 

A breakdown below this level could trigger a cascade of liquidations, driving the price even lower.

However, should the price bounce from this key support, it could indicate that buyers are stepping in to protect the $15.00 mark, creating a potential floor for the price.

Source: Coinglass

What are traders feeling about the asset?

The Weighted Sentiment for HYPE was -0.91 at press time, reflecting a predominantly bearish outlook among market participants.

Recent market developments, including the price drop, have pushed sentiment into negative territory, which could be a reflection of growing concern. 

This negative sentiment aligns with the ongoing downward pressure in the market, as traders seem cautious about potential further declines.

Source: Santiment

Conclusively, given the current market conditions, HYPE is at a critical juncture. Despite the whale’s large purchase, the price is struggling to hold above the $15.00 support level, and sentiment remains bearish. 

Technical indicators suggest that the market may be in a consolidation phase, but risks of further downside remain if support breaks.

Therefore, unless the price rebounds quickly, further downside risk seems likely in the short term.