Hyperliquid (HYPE) extended its losses on Monday, dropping more than 2% amid broad-based weakness across the cryptocurrency market. While institutional investors continue to show strong interest through exchange-traded funds (ETFs), bearish signals from the derivatives market suggest growing caution among retail traders, heightening the risk of additional near-term declines.
Risk-Off Sentiment Weighs on HYPE
The latest dip coincides with escalating geopolitical tensions between the United States and Iran over the Strait of Hormuz, fueling a wider risk-off mood across financial markets. Like many altcoins, Hyperliquid has struggled to attract new buyers as investors scale back exposure to higher-risk assets.
Derivatives data from CoinGlass reveals deteriorating sentiment among leveraged traders. Hyperliquid’s futures Open Interest (OI) fell by over 1% in the past 24 hours to approximately $2.7 billion, reflecting a reduction in active leveraged positions. Declining OI alongside falling prices typically indicates position closures rather than new bullish entries.
Total liquidations during the same period reached $2.8 million, with long positions accounting for roughly $2.3 million—highlighting forced exits by bullish traders and reinforcing current selling pressure.
Adding to the bearish outlook, HYPE’s funding rate has sharply declined to 0.0275%, signaling a growing preference for short positions and expectations of continued price weakness in the near term.
Institutional Demand Remains Strong
Despite weakening retail sentiment, institutional appetite for Hyperliquid remains robust. HYPE-focused ETFs recorded $10.36 million in net inflows last week, marking the ninth consecutive week of positive flows. This sustained institutional buying suggests long-term investors are accumulating HYPE despite recent volatility.
Technical Outlook: 50-Day EMA as Critical Support
HYPE is currently trading around $65, having broken below a key ascending trendline that previously offered support near $68.50. Market focus has now shifted to the 50-day Exponential Moving Average (EMA) at $63.13—the next major support level.
A decisive daily close below the 50-day EMA could trigger accelerated selling, potentially exposing the token to the next support zone at $53.71.
Technical indicators corroborate the bearish shift. The Relative Strength Index (RSI) has slipped to approximately 44, below the neutral 50 mark, indicating waning buying momentum. Meanwhile, the Moving Average Convergence Divergence (MACD) has crossed below its signal line, with the histogram turning increasingly negative—signaling strengthening bearish momentum.
For bulls to regain control, HYPE must reclaim the broken trendline and push back toward the prior swing high at $75.58, which now acts as primary resistance. On the downside, a sustained break below the 50-day EMA at $63.13 could pave the way for a deeper correction toward $53.71. However, ongoing institutional ETF inflows may provide longer-term support despite near-term headwinds.