Hyperliquid's $9.8 Million Team Wallet Sale: Is HYPE's $20 Support at Risk?

Hyperliquid's recent token distribution and market behavior have led to significant downward pressure on its HYPE token, which has seen a drop to levels reminiscent of May 2025. With a $9.8 million sale affecting market sentiment, we explore whether the support level of $20 is under threat.

Key Takeaways

Hyperliquid’s HYPE token has faced substantial downward pressure, currently trading at $21.02 after a significant drop.
Nine team wallets sold 450K HYPE, valued at $9.8 million, further fuelling bearish sentiments.
Many whales are now adopting short positions, expecting further declines in HYPE's value.
The recent trading metrics indicate a majority bear outlook among traders, and $20 support could be at risk if selling pressure persists.

Analyzing Hyperliquid's $9.8 million team wallet sale: Is HYPE's $20 support at risk?

Recent Market Activity

In a challenging market environment, Hyperliquid [HYPE] has encountered strong selling pressure, bringing its value down to levels last observed in May 2025. HYPE fell to $20.8 before experiencing a slight recovery, trading at $21.02, which represents a daily decrease of 9.21%, showcasing the intensity of the bearish trend.

Team Wallets Selling Off

As HYPE continues to decline, the recent distribution of tokens has compounded the downward trend, with significant amounts hitting the sell-side. According to Qwantifyio, nine team wallets linked to Hyperliquid sold 450,000 HYPE, amounting to $9.8 million.

Hyperliquid team wallet sells

In January, out of the 1,125,766 HYPE tokens distributed, 62.4% were sold through over-the-counter (OTC) transactions, while 33.14% were staked. Consequently, the spot address is left holding only 50,000 HYPE, roughly valued at $1 million. This pattern indicates that Hyperliquid has been offloading most of its unstaked and unlocked coins. Given the team's past behavior, it's likely they will continue to sell future unlocks, further increasing the circulating supply and intensifying bearish effects in the current market.

Bearish Sentiments Among Whales

With the prolonged downtrend of Hyperliquid, investors, particularly whales, have become bearish, opting to short the market. Onchain Lens reported that a whale opened a short position for 928,898 HYPE valued at $19.89 million.

Hyperliquid whale shorts

When whales choose to engage in short positions, it typically indicates their expectation of continued price declines. This bearish sentiment is not confined to whales; most market participants share the same outlook. CoinGlass suggests that Hyperliquid's derivatives volume surged by 79.8% to $1.46 billion, while open interest increased by 1.17% to $1.2 billion.

Hyperliquid long short ratio

An increase in both open interest and volume points to heightened trading activity, with many traders currently adopting short positions as indicated by a Long Short Ratio below 1. With the ratio at 0.89, it suggests a prevailing bearish sentiment among traders anticipating further price declines.

The Risk to $20 Support

Hyperliquid has now reached an 8-month low due to intensified selling pressure, which accelerates the downward momentum. Consequently, HYPE's Moving Average Convergence Divergence (MACD) has dipped beneath its signal line, down to -1.1, hinting that sellers have taken control of the market.

HYPE MACD & DMI

At the same time, its Directional Movement Index (DMI) has decreased to 13, indicating a deeper bearish trend and weaker market structure. Together, these bearish indicators suggest that if selling pressure persists, HYPE may break through the crucial support level of $20, potentially dropping to $18.7.

Conclusion

The current market dynamics surrounding Hyperliquid highlight significant bearish trends threatening HYPE's support level. As selling continues and whales maintain their short positions, the risk of a further decline looms large. Investors should closely monitor these developments as they may impact future price movements.