Hyperliquid (HYPE) Drops 8% Amid Low Retail Demand
Hyperliquid (HYPE) has fallen 8% this week, staying above $38. This marks its third week of losses. Retail interest remains low. The market maker, Hyperliquid Provider (HLP), faced a $4.9 million loss in a stress test. Technical analysis warns of more downside if HYPE falls below the $35 support level.
HLP Reports $4.9 Million Loss in Stress Test
Hyperliquid Provider, the market maker for the Hyperliquid DEX, reported a $4.9 million loss on Wednesday. This happened when a Popcat (POPCAT) trader split $3 million into 19 wallets to place bids near $0.21. The trader then took nearly $30 million in long positions.
When the buy bids were canceled, the price dropped below the liquidation level. HLP had to cover these positions due to low market liquidity, causing the loss. The DEX paused its Arbitrum bridge, but deposits and withdrawals remain active.
Retail demand for HYPE stays weak after a nearly $1 billion drop in futures Open Interest (OI) in early October. Futures OI shows the value of active contracts. It fell from $2.08 billion on October 30 to $1.56 billion on Thursday, according to CoinGlass.
HYPE Faces Key Support at $35
Hyperliquid trades below the 200-day Exponential Moving Average (EMA) at about $39. It failed to break the 50- and 100-day EMAs near $43. This drop risks breaking the $35 support tested on November 4.
The MACD is below the signal line, indicating selling pressure. The Relative Strength Index (RSI) is at 43 and moving down, warning of more losses possible. If HYPE falls below $35, it could drop further to the $30 support from May 30.
If the price recovers above $42, it might test the $50 resistance level.
