Hyperliquid“s HYPE token is currently navigating a pivotal moment as it retests a significant breakdown area on the charts. The token is trading at $34.81, just below its 50-day simple moving average (SMA) of $39.73 and near its 200-day SMA at $36.32. This positioning often indicates uncertainty in the market, suggesting a potential decisive move is on the horizon.
Market sentiment remains bearish, with the Fear & Greed Index registering at 22, demonstrating ongoing anxiety among traders. This comes in spite of a recent streak of positive trading days. The asset”s volatility stands at 10.71%, hinting at a turbulent move ahead as market players adjust their expectations following recent breakdowns.
Analyst Ali Martinez has identified a classic head-and-shoulders pattern in the HYPE chart. This structure shows the left shoulder forming in early July, the head peaking above $55 in September, and the right shoulder emerging in October. The neckline for this pattern is positioned just below the $37 mark, a level HYPE has already breached.
Currently, HYPE is retesting this neckline from below, a scenario often indicative of a bearish retest that typically precedes further declines. Martinez”s analysis suggests multiple potential downward paths, including brief recovery attempts before a sustained move toward the $25 region, which aligns with the next significant support area on the chart.
This setup indicates that the recent bounce is not a sign of recovery strength but rather a liquidity retest, as the price revisits the level it previously broke down from. If HYPE fails to reclaim this neckline decisively, sellers are likely to take control, pushing the price toward noted support levels around $29, $26, and ultimately $25.
Market data reflects a broader trend of weakness. Recent charts indicate several unsuccessful attempts to maintain momentum above the mid-$35 range, leading to lower highs that reinforce the prevailing bearish sentiment. Despite intraday fluctuations pushing the price to $36, selling pressure has consistently emerged in response.
The Relative Strength Index (RSI) is currently at 47.34, signaling neutral momentum. However, the failure to breach into bullish territory supports the notion that the recent upward movements are corrective rather than indicative of a trend reversal. With both short- and long-term SMAs positioned above the current trading price, HYPE remains technically below its essential trend zones.
Until HYPE can convincingly reclaim the neckline area with substantial volume and maintain levels above the critical moving averages, the prevailing narrative is likely to remain bearish, consistent with the head-and-shoulders pattern and negative sentiment metrics.
Traders will closely monitor the potential for price to break below recent local lows, which would pave the way to the projected target of $25. Additionally, the current high volatility combined with frequent intraday rallies suggests that the path downward may involve several attempts to reclaim resistance before the next significant decline.
At this juncture, the market is at a crucial crossroads: the choice lies between reclaiming the neckline to negate the breakdown or rejecting at resistance, validating the bearish setup that has been developing over recent months.
