Hyperliquid flashes ‘death cross’ despite $445M in buying – Is HYPE’s rally fading?

Hyperliquid’s [HYPE] growth has been steadier over the past couple of days.

Notably, the asset recently made a new high, reaching an all-time high of about $89 on the chart. However, the asset is now showing signs of a potential reversal of those gains at a time when optimism continues to fuel the market.

While there are still clear signs that bulls are trying to maintain control of the market, sellers are gradually taking over in the short term as market conditions begin to favor them.

Chart analysis warns of decline

The Moving Average Convergence Divergence (MACD) formed a ‘death cross’ pattern in the past day, hinting that the market may be transitioning into a new phase.

The MACD is a momentum-tracking indicator, and this particular pattern forms when the blue MACD line drops below the orange signal line on the chart. This is often followed by a price decline as the asset moves lower.

This may not necessarily be the case for HYPE, as the last time the asset formed a ‘death cross’ in June, the price declined into a range-bound pattern, as indicated on the chart.

If the same pattern occurs, there is a high chance that HYPE continues to trade within a range, with the $80 level acting as a key area for the time being.

Market accumulation holds price

Spot market traders have continued to accumulate HYPE tokens across both short- and long-term time frames.

Spot investors withdrew about $4.54 million worth of HYPE from exchanges over the past 24 hours, following $73.32 million in purchases. Over the past seven days, investors purchased $445.0 million worth of HYPE, driving netflows to about -$17.95 million.

The continued accumulation reflects investors’ conviction that HYPE will maintain its bullish trajectory in the near term.

Importantly, if the accumulation is set to continue, there is a high chance that the decline will not result in a massive drawdown, giving the asset a chance to rebound in the near term.

Investors should be watchful

The perpetual market shows that there has been a growing level of losses among HYPE long traders.

At the time of writing, liquidation data shows that roughly $225,270 was lost by long traders in the market over the past day, while short traders lost just $9,520 during the same period.

This implies that long traders lost roughly 23.6 times more than short traders during that window. This indicates that the market’s directional bias at the time.

Currently, there is a high chance that the price could swing even lower from its current level, creating new lows on the chart.

Final Summary

• HYPE faces short-term downside risk after the MACD formed a ‘death cross,’ potentially pushing the asset toward the $80 level.
• Strong spot accumulation could limit the decline, with $445 million worth of HYPE purchased over the past seven days.