Hyperliquid Update: Why a $648K Whale Transfer Did Not Boost HYPE Prices

Recent movements in the Hyperliquid (HYPE) market have seen significant whale activity, but this has not translated into price gains. Specifically, Dragonfly Capital withdrew a substantial amount of HYPE from exchanges, indicating a preference for self-custody. However, the overall market trends suggest that sellers are regaining control, as indicated by increasing inflows and declining prices.

Key Takeaways

Dragonfly Capital withdrew over $648K in HYPE, signaling potential long-term holding instead of immediate selling.
Despite this withdrawal, market trends show an increase in selling activity, leading to price declines.
The HYPE price faced resistance at $28, and ongoing selling pressure could push it down to $22 or lower.
Open Interest (OI) in derivatives has dropped significantly, indicating a cautious market attitude.
Liquidation levels remain low, suggesting limited short-term recovery opportunities.

Sellers regain control of HYPE after inflow reversal

Whale Activity and Market Dynamics

Recently, Dragonfly Capital made headlines by withdrawing 25,989.71 HYPE from Bybit, equivalent to about $648.6K. This move appears to be a tactical choice aimed at securing assets rather than distributing them in the market. While this shows confidence in long-term holding strategies, the overall market does not reflect widespread accumulation among other traders.

In this scenario, large entities often shift their holdings to manage risk or tighten strategies, but isolated withdrawals lose their bullish potential if there isn't significant market demand to support price increases. In fact, the price of HYPE has continued to decline, highlighting that this withdrawal did not catalyze a broader positive shift in market sentiment.

Sellers regain control of HYPE after inflow reversal

Spot Flow Trends Indicate Seller Control

The dynamics of spot flows have recently taken a sharp turn. Initially, the market saw $1.62M in net outflows, hinting at a decrease in available supply and lowering sell pressure. However, this pattern quickly reversed, with the latest data revealing $538.75K in net inflows, suggesting that tokens are moving back onto exchanges.

This trend indicates that sellers are feeling more in control after a brief respite, as inflows typically signal preparation for selling rather than holding. Unfortunately for HYPE, prices continued to fall instead of stabilizing, which casts doubt on the possibility of a bullish recovery.

Rejection at Key Resistance Levels

The price of HYPE faced a critical rejection at the $28 resistance level, indicating that sellers are firmly in command at higher prices. This rejection has directed HYPE back toward the $25 support level, which appears increasingly vulnerable. If selling pressure remains, the price could descend to $22, and potentially even lower to $15 before any significant recovery occurs.

Current trend indicators reinforce this bearish view. As of now, the Directional Movement Index (DMI) reveals sustained seller control, with a -DI of 24 surpassing a +DI of 17. Additionally, the ADX is at 22, indicating that bearish momentum is not fading.

A Drop in Open Interest Indicates Caution

Analyzing the derivatives market provides more insight into current risk preferences. The Open Interest (OI) has plummeted 7.91%, sitting at $1.31 billion, which reflects traders opting to close positions rather than increase their risk exposure.

Typically, an increase in OI accompanies market bottoms as traders prepare for rebounds. However, this pattern has not emerged with HYPE, suggesting a reluctance rather than confidence among traders. A declining OI, coupled with falling prices, often indicates positions being unwound rather than aggressive buying, pointing to a lack of support for upward movement.

Minimal Liquidations Suggest Limited Recovery Potential

The latest liquidation data reveals limited forced positioning, reducing the chances for a significant price rebound. Currently, long liquidations total nearly $1.94 million, while only $1.58K in shorts were liquidated, showing an absence of pressure on short positions.

Notably, Binance recorded only $1.48K in short liquidations compared to a much larger $142.6K in longs liquidated, and Hyperliquid noted $1.69M in long positioning with almost no shorts affected. This discrepancy lowers the likelihood of a price recovery driven by short squeezes.

Conclusion: Sellers Maintain Control Amidst Market Pressures

Currently, all major indicators are aligned, suggesting that sellers retain control of the HYPE market. Spot inflows are increasing, the price structure is weak, trend indicators favor sellers, and liquidation pressures are low. Unless there is a notable reversal in market flows and traders begin to increase their risk exposure, the prospects for HYPE remain bleak. Further price declines may occur before any real recovery is seen.