Here’s why HYPE’s 23% price rally is running the risk of reversing itself
HYPE's gains have been significant, but can they last?
HYPE hiked by 23.24% in 24 hours to hit $71.22 on the charts. Thanks to the same, it appeared to be on its way to test the $74-resistance at press time.
HYPE’s surge was primarily strengthened by President Donald Trump saying the Commodity Futures Trading Commission (CFTC) is working on bringing the token into the U.S through a compliant and legal framework.
Bullish daily momentum across the board
At the time of writing, momentum indicators also seemed to be supporting the token’s bullish momentum. However, the sudden surge pushed HYPE into overbought territory, hinting that a possible near-term correction or consolidation is likely to occur.
The RSI’s reading 73.90, well into overbought territory. This indicated that while buyers might have the clear advantage, the rally might be stretched thin. Owing to the same, it could face selling pressure in the near term.
The MACD was also in support of the bullish trend, with the MACD line above both the Signal and Zero lines and the histogram flashing signs of strong positive momentum.
The OBV was trending relatively flat, but its recent uptick is a good start. This buying activity needs to be sustained for the OBV to provide stronger confirmation that the uptrend is indeed being supported by the market on the daily timeframe.
Look out for pullback on 4-hour chart!
The four-hour chart seemed to agree with the daily timeframe, although a correction was already starting to take place. And yet, the broader price trend was still upwards. This was supported by the bearish divergence between the price and OBV, indicating that buying pressure may be fading as the price continues to climb.
The RSI was at 84.80 and has remained in overbought territory for the last 24 hours, increasing the probability of a short-term pullback. On the contrary, the MACD stayed above the Signal and Zero lines and trended upwards. This suggested that the token’s bullish momentum was likely to persist.
Final Summary
- As long as HYPE holds around $70, it can maintain its bullish structure and retest $74-resistance level.
- A deeper break below $65 would weaken the current setup and increase the risk of consolidation towards $60.
