HyperLiquid Price Bounces at Golden Pocket, But Downside Risk Persists

Hyperliquid (HYPE) is currently trying to stabilize after hitting a significant technical support area. However, early indications show that the recent price bounce may not be strong enough. Although the price has responded at the 0.618 Fibonacci retracement level, commonly known as the golden pocket, the low trading volume and lack of follow-through buying create concerns that this upward movement may merely be temporary rather than a sign of a lasting recovery.

Key Takeaways

Hyperliquid shows a reaction at the 0.618 Fibonacci golden pocket but lacks strong buying volume.
The $27 support level is crucial; failure to hold above this may lead to significant downward movement.
The current bounce lacks conviction and may be a short-term reaction rather than a trend reversal.
If prices fall below $27, a potential move toward the next support target at $19 could occur.
Buyers need to demonstrate strength through increased volume to change the current bearish trend.

Hyperliquid price low volume reaction for golden pocket suggests weakness

The market faces a critical test around the $27 support level, which if broken, could lead to further declines.

Analysis of Hyperliquid's Price Movement

HyperLiquid price bounces at golden pocket HyperLiquid (1D) Chart, Source: TradingView

Hyperliquid's recent bounce from the golden pocket initially seems positive from a technical analysis perspective. The 0.618 Fibonacci retracement is a key level watched by traders, often producing reactions during corrective phases. However, not all reactions indicate reversals, and in this scenario, the quality of the bounce raises concerns.

A significant weakness observed is the lack of volume growth. Healthy market reversals usually see increased buyer participation, signaling confidence and capability to absorb selling pressure. Instead, the bounce in Hyperliquid has occurred with weak volume, indicating thin demand and that sellers may maintain control.

From a market structure viewpoint, Hyperliquid has yet to regain any major resistance or significant volume levels after the bounce. Absent a reclaim of prior structural setups, upward movements are likely to be temporary relief rallies rather than signs of a trend change, keeping the overall sentiment cautious. This is highlighted even despite Hyperliquid Strategies announcing a $30 million buyback to support its HYPE-linked stock.

The $27 level is now critical. It represents the closest meaningful support beneath the current price and serves as the last safeguard before the market dips into a low-liquidity area. If prices fall below $27, the technical support becomes sparse, heightening the chances of a faster drop.

Should Hyperliquid start trading and closing beneath $27, the risk shifts toward a capitulation-style movement. Such capitulation often occurs when prices breach regions with little historical trading, triggering stop orders and leading to rapid sell pressure. In this situation, the next significant downside target would roughly be around $19, representing a higher time-frame support zone.

The larger context of price action also underscores this downside risk. The current bounce has not changed the established bearish structure, as lower highs remain in place. Until buyers show strength through robust moves and significant volume, any upward rallies are likely to be met with selling pressure rather than sustained momentum. Notably, the DeFi Total Value Locked (TVL) is rebounding toward $140 billion, with Hyperliquid and its competitors leading the way, which emphasizes a disconnect between ecosystem growth and short-term price weakness.

Though the golden pocket still holds significance, maintaining the price above this area and securing the $27 support could lead to consolidation or the formation of a more stable base. However, time is a critical factor. Extended consolidation without a price increase tends to support the prevailing trend, which at this moment is downward.

What to Expect in the Future Price Action

If Hyperliquid fails to maintain its position above $27, the likelihood of a deeper corrective move towards $19 significantly increases. For a convincing bullish reversal, strong trading volume and a reclaim of critical structural levels are essential. Until these conditions are met, downside risks remain high.