Can Hyperliquid bulls hold $40 support as whale dumps $1.8 mln in HYPE?

Hyperliquid whales have recently stepped out of the market. Strangely, those whales returning to the market during a period of heightened volatility are cashing out. 

According to Onchain Lens, a Hyperliquid whale called Cooker.hl jumped into the market and sold 45,786 HYPE for $1.8 million in USDC. 

The whale made this sale at an average price of $39.39 and later deposited the proceeds into Coinbase. 

The whale exiting below $40 signaled fear, with investors anticipating further losses. This perception stems from HYPE having traded below these price levels for three consecutive days. 

Often, when a whale decides to cash out while the market is weakened, downside risk intensifies. 

HYPE momentum remains bearish

Interestingly, although a major investor exited the market, HYPE successfully defended key levels. 

For starters, Hyperliquid has traded within a downtrend since the uptrend collapsed at $42 five days ago. In doing so, the altcoin dropped to a low of $38.8. 

After days of decline, the market seems to have found a footing and rebounded. At press time, Hyperliquid traded at $40.7, up 4.12% on the daily charts, signaling a potential trend reversal. 

Despite these gains, the downward momentum remains extremely elevated. Looking at the Aroon Indicator, the Aroon Down line currently sits above the Aroon Up line at 92%. 

When Aroon Down hits elevated levels, it suggests the downtrend is stronger, with lows occurring more frequently than highs. Thus, sellers have significant control of the market. 

At the same time, the Stochastic Momentum Index (SMI) dropped deeper into the negative zone, confirming the downtrend’s strength. 

Taken together, these two indicators suggest that HYPE will likely fail to hold $40 and will drop to $38, making the rebound short-lived. To ensure a trend reversal, HYPE needs a daily close above $40, setting the ground for a move towards $42. 

Why is Hyperliquid’s market weakening?

Lows have outpaced highs recently as most participants in the perpetual markets have withdrawn capital. Defillama data showed that Perpetual Volume dropped by over $1 billion, falling from $7.6 billion to $6.3 billion.

While reduced activity on the perpetuals has stabilized the market in the past, the market tends to react negatively in the short term.

Additionally, the market pullback has coincided with higher Futures selling volume. Over the past three days, for example, Hyperliquid Futures saw $640 million in inflows compared to $651 million in outflows.

As a result, the altcoin’s Futures Netflow dropped 5% to -$11 million, suggesting more positions have recently closed. HYPE has mostly performed poorly when the derivatives market experiences reduced speculation, which helps explain the current market conditions.

Final Summary

• Hyperliquid whale Cooker.hl sold 45,786 HYPE for $1.8 million in USDC. 
• Hyperliquid [HYPE] defied the odds and reclaimed $40, although market momentum remains strongly bearish.