Hyperliquid is facing one of its most important technical tests since its explosive rally earlier this year. After reaching an all-time high of $75.48 on June 2, HYPE has lost more than 26% of its value and is now hovering around a key support zone that could determine its next major move.
While some large investors continue accumulating the token, bearish technical patterns, declining futures activity, and a major token unlock event have raised concerns that Hyperliquid may not be finished correcting. If current support fails, analysts warn that the token could revisit levels below $40 in the coming weeks.
HYPE Struggles After Record Rally
Hyperliquid enjoyed one of the strongest rallies in the crypto market during May and early June, attracting significant trader attention and institutional interest.
However, momentum shifted quickly after the token reached its record high.
According to crypto.news data, HYPE briefly dropped into the mid-$55 range on June 10, marking a decline of more than 26% from its peak. The selloff coincided with a sharp reduction in derivatives exposure, as futures open interest fell to approximately $5.86 billion while leveraged long positions were liquidated across the market.
The decline has placed the token under increasing pressure as traders reassess risk amid broader crypto market uncertainty.
$700 Million Token Unlock Adds Selling Pressure
One of the biggest catalysts behind the recent weakness was Hyperliquid’s June 6 token unlock event.
The vesting release added approximately 9.9 million HYPE tokens to circulation, representing nearly $700 million worth of supply entering the market.
Large unlock events often increase volatility because early investors and token holders gain access to assets that were previously locked. Many market participants viewed the event as an opportunity to secure profits after HYPE’s rapid ascent during May.
The additional supply arrived at a difficult time, amplifying existing selling pressure and contributing to the ongoing correction.
Macro Conditions Continue to Weigh on Crypto Markets
Hyperliquid’s decline has not occurred in isolation.
Broader crypto markets remain under pressure as investors reduce exposure ahead of important U.S. inflation data. Bitcoin and Ethereum continue trading below key technical levels, while risk appetite across digital assets has weakened significantly.
At the same time, capital has increasingly flowed toward large-cap technology companies and artificial intelligence-related stocks. This shift has reduced liquidity available for higher-risk crypto assets, including emerging tokens such as HYPE.
As a result, speculative markets have struggled to maintain the strong momentum seen earlier in the year.
Arthur Hayes Returns to the Spotlight
Market attention has also focused on BitMEX co-founder Arthur Hayes.
Earlier this month, Hayes disclosed that he had sold his entire HYPE position, valued at approximately $18 million at the time. His decision triggered concern among traders because Hayes had previously been one of Hyperliquid’s most vocal supporters.
Shortly afterward, blockchain analysts identified a wallet linked to Hayes withdrawing approximately 33,978 HYPE worth around $2.09 million from Bybit.
While speculation quickly spread that Hayes was rebuilding his position, he publicly denied that the transaction represented a fresh investment in HYPE.
Despite the uncertainty, his continued involvement has kept traders closely watching on-chain activity for signs of renewed institutional interest.
Head-and-Shoulders Pattern Raises Red Flags
The biggest concern for bulls currently comes from the technical chart structure.
On the four-hour timeframe, Hyperliquid has developed a classic head-and-shoulders pattern, one of the most widely recognized bearish reversal formations in technical analysis.
The pattern consists of:
- Left shoulder near $64
- Head near $75
- Right shoulder around $64
- Neckline support near $55
This neckline has repeatedly acted as support throughout the past week.
However, repeated tests of support often weaken its strength.
If sellers successfully push HYPE below the $55 neckline, the pattern would officially activate and signal a potential continuation of the downtrend.
Breakdown Target Points to $36
The measured target generated by the head-and-shoulders pattern is particularly concerning.
By calculating the distance between the head and neckline, analysts estimate a downside target near $36.
That would represent another decline of roughly 35% from current levels.
A move toward the mid-$30 range would effectively erase a large portion of Hyperliquid’s 2026 gains and place the token back near levels last seen before its explosive rally.
While technical targets do not guarantee future outcomes, traders often use them as reference points for managing risk and identifying possible support zones.
Momentum Indicators Favor Sellers
Several technical indicators continue to support the bearish outlook.
Relative Strength Index (RSI)
The four-hour RSI has fallen to approximately 36, indicating weakening buying momentum and increasing bearish control.
MACD
The MACD has crossed into negative territory on both lower and higher timeframes, signaling that downward momentum remains dominant.
Daily Chart Weakness
The daily chart also shows a bearish flag pattern, another continuation structure that often develops after sharp declines.
Bearish flags typically appear when prices consolidate briefly before continuing lower. Recent price action suggests that sellers may already be attempting to complete that second phase.
Collectively, these indicators suggest that bulls still face significant challenges despite recent stabilization attempts.
Key Support and Resistance Levels
Current market structure highlights several critical price zones.
Important Support Levels
- $55 neckline support
- $54 short-term liquidity zone
- $44 secondary support region
- $36 head-and-shoulders target
Major Resistance Levels
- $64 right shoulder resistance
- $66-$68 liquidation cluster
- $75 all-time high
A recovery above $64 would weaken the current bearish setup and potentially invalidate the head-and-shoulders pattern.
Until then, sellers remain in control.
Whale Activity Offers Some Hope
Not all signals are negative.
Several whale investors have continued accumulating HYPE during the correction, suggesting that some large market participants still view the decline as a buying opportunity.
Historically, institutional accumulation during periods of weakness has often supported longer-term recoveries.
Analyst Altcoin Sherpa recently noted that while additional downside remains possible, he continues to view Hyperliquid as one of the strongest long-term projects in the altcoin market.
According to Sherpa, a period of consolidation and base formation could ultimately strengthen the asset’s longer-term structure.
What Happens Next?
The next few trading sessions could prove decisive for Hyperliquid.
If buyers successfully defend the $54-$55 region, the token may establish a short-term bottom and begin building a recovery toward the $64 resistance area.
However, a confirmed breakdown below support would significantly strengthen the bearish case and increase the likelihood of a move toward the $44-$36 range.
For now, the battle around the neckline remains the most important technical development for HYPE traders.
Final Thoughts
Hyperliquid remains one of the most closely watched altcoins in the market, but recent price action has shifted attention from explosive growth to downside risk management.
The combination of a large token unlock, declining futures participation, weaker market sentiment, and a developing head-and-shoulders pattern has created a challenging environment for bulls.
While long-term fundamentals continue to attract supporters, the short-term technical picture remains fragile.
As long as HYPE trades near the critical $55 support zone, traders should expect elevated volatility. A successful defense could revive bullish momentum, while a breakdown may open the door to a much deeper correction toward the mid-$30 range.
