HYPE Crypto Price Forms Risky Pattern as Hyperliquid Metrics Deteriorate

Source: CryptoNewsNet Original Title: HYPE crypto price forms risky pattern as key Hyperliquid metrics dive Original Link:

HYPE Crypto Price Technicals Point to More Downside

HYPE crypto price has pulled back significantly in the past few months, moving from a record high of $60 in September to the current $25.8, representing a 56% retreat.

The daily timeframe chart shows that the token has dropped below the 61.8% Fibonacci Retracement level at $28.5, confirming a bearish outlook. It has also dropped below all moving averages, a sign that bears remain in control for now.

Hyperliquid price has formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. This pattern often leads to more downside and remains below the Supertrend indicator. Additionally, the token previously formed a head-and-shoulders pattern, a common bearish reversal sign.

Therefore, the most likely HYPE price forecast is bearish, with the next target being at $20, approximately 22% below the current level. A move above the key resistance level at $28 would invalidate the bearish outlook.

Hyperliquid’s Perpetual DEX Facing Stiff Competition

The primary reason for HYPE’s price crash is that Bitcoin and other altcoins have been in a strong downtrend. Bitcoin has dropped from the year-to-date high of $126,200 in October to the current $95,000, with other top altcoins like Ethereum and Cardano also slumping.

Key Hyperliquid metrics have deteriorated in the past few months due to both the ongoing crypto market decline and rising competition in the perpetual futures market. Data shows that the total volume in the perpetual futures market has dropped from last year’s high of $1.32 trillion in October to this month’s $521 billion.

Hyperliquid’s volume has declined from a high of $396 billion in August to this month’s $94 billion. Monthly fees have tumbled to $36 million, down from last year’s high of $144 million.

Competition in the network has continued rising, with most coming from Aster, Lighter, and Grvt. Aster network handled over $123 billion in the last 30 days, while Lighter’s volume was $118 billion. Grvt handled $40 billion, and Hyperliquid processed transactions worth over $145 billion. In the past, Hyperliquid was the most dominant player in the industry.

Additional metrics paint a concerning picture: the total value locked (TVL) in its layer-1 network has plunged to $2.65 billion from the all-time high of $8.35 billion. The stablecoin supply in the network has also dropped to $4.9 billion from the all-time high of $6.2 billion.

These deteriorating metrics have affected the number of HYPE token buybacks and token burns. The network uses its fees to burn HYPE tokens and repurchase them, which helps reduce the token supply.