Hyperliquid (HYPE) is currently navigating a period of intense bearish pressure, with its token price plummeting to an 8-month low. A confluence of factors, from significant internal token sales to a widespread shift in investor sentiment, is pushing HYPE closer to critical support levels.
Internal Sales Accelerate Downward Trend
Nine team-linked wallets recently offloaded a staggering 450,000 HYPE tokens, valued at $9.8 million, to Flowdesk. This massive sale accounts for a significant portion—62.4%—of the HYPE distributed in January alone, with the tokens ending up on the open market rather than being staked. This consistent selling by insiders, particularly of unstaked and unlocked coins, has substantially increased the token's circulating supply, exacerbating the bearish momentum in an already struggling market.
Whales and Derivatives Signal Deepening Bearishness
The prolonged downtrend has led to a decisive flip in market sentiment, particularly among large investors. On-chain data reveals whales are now actively shorting HYPE, with one notable instance involving a $19.89 million short position. This bearish outlook extends across the derivatives market, where Hyperliquid's Derivatives Volume surged by nearly 80% and Open Interest rose over 1%, indicating heightened participation predominantly from traders taking short positions. With a Long Short Ratio of 0.89, the market consensus strongly anticipates further price declines.
Critical $20 Support Under Threat
Technical indicators paint a similarly bleak picture, reinforcing the likelihood of continued downward movement. The Moving Average Convergence Divergence (MACD) has crossed below its signal line, dropping to a bearish -1.1, while the Directional Movement Index (DMI) has fallen to 13, deep within the bearish zone. These signals collectively point to overwhelming seller control and a weakening market structure. Consequently, if the relentless selling pressure persists, HYPE faces a high risk of breaching the crucial $20 support level, potentially paving the way for a further drop towards $18.7.
