Hyperliquid (HYPE) weekly 8% plunge... ETF fund outflow threatens $50

▲ Hyperliquid (HYPE), USD/ChatGPT generated image ©

As Hyperliquid (HYPE) broke through key support levels and funds continued to flow out of spot ETFs for four consecutive days, the possibility of a further price drop to around $50 has increased.

According to investment media outlet FXStreet on July 29 (local time), Hyperliquid traded below $54.80 after falling more than 8% this week. The weakening institutional demand and the breach of key technical support levels have made the short-term bearish trend even more pronounced.

According to SoSoValue data, $1.24 million was net outflowed from spot Hyperliquid ETFs listed on the US stock market on the 28th. The fund outflow continued for four consecutive trading days. Analysis suggests that if the net outflow volume expands during the week, HYPE's correction range could deepen. The derivatives market also leaned bearish. The long/short ratio compiled by Coinglass was 0.95, close to its lowest level in over a month. A ratio below 1 indicates that more traders are betting on a price decline.

Technical indicators also point to further downside potential. HYPE is trading above its 200-day exponential moving average of $50.80 but remained below its 100-day line of $57.26. The Relative Strength Index (RSI) was 35, indicating weak downward momentum, and the Moving Average Convergence Divergence (MACD) also remained in negative territory. As the price is below key resistance levels, there is a possibility of encountering selling pressure even if it rebounds.

On the upside, the first resistance zone is between $57.30 and $57.40, where the 100-day exponential moving average and the 50% Fibonacci retracement level coincide. Following that, the 50-day line at $61.28 and the 38.2% Fibonacci retracement level at $65.07 await in succession. Conversely, if the 200-day line at $50.80 and the 61.8% Fibonacci retracement level at $49.75 are breached, the downside target could be $38.85, and in the worst-case scenario, it could drop to $24.96.

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