Hyperliquid’s token dropped sharply this week as its recent rally lost momentum and investors booked profits.
Hyperliquid (HYPE) price dropped to $33.4, down by 15% from its highest point this month.
HYPE entered a correction for two main reasons. First, the pullback followed a sharp rally of over 330% from its April low, which had made it one of the top-performing tokens in the crypto market.
It is common for a surging asset to retrace as investors take profits. The decline also reflects the concept of mean reversion, in which price returns toward its long-term moving averages after extreme moves in either direction.
Second, HYPE price dropped as the recent crypto market rally faded. Bitcoin (BTC) fell to $107,400, one week after hitting a record high near $112,000. Meanwhile, the total crypto market cap dropped to $3.39 trillion.
Falling crypto prices affect HYPE because it may affect the volume on its platform. This trend has yet to reflect on Hyperliquid, where the daily volume rose by 62% to $11.25 billion.
Still, there are signs that the HYPE price will bounce back because of its market share in the perpetual futures market. It has handled transactions worth over $37 billion in the last seven days, much higher than Jupiter, Vertex Edge, and MYX Finance combined.
HYPE price technical analysis
The daily chart shows that the HYPE price bottomed at $9.3370 in April and then rebounded to a record high of $39.88 this month. It formed a cup-and-handle pattern whose upper side was at $28.31.
Since this cup had a depth of approximately 66%, measuring the same distance from the top of the cup projects a target of $47.
The most likely scenario is that HYPE drops 15%, retests the $28.31 breakout zone, and then resumes its uptrend toward the $47 target. This pattern is known as a break-and-retest, where an asset breaks resistance, retests it as support, and continues in the direction of the original breakout.
