Key Takeaways
When Hyperliquid (HYPE) price experienced a 55% correction between Feb. 18 and March 13, it appeared to invalidate the impressive rally from late last year.
However, the narrative has changed in the past seven days. The HYPE token price has rebounded, now trading above $16, marking a 25% increase.
While buying momentum has pushed it higher, some indicators suggest that the uptrend could stall if bulls fail to sustain the breakout. Will the token manage to defy the divergence and or will the price pullback?
HYPE Bearish Trend Not Completely Over
On the daily chart, the HYPE token price crashed from $27.53 to $12.06 in less than two months. This decline led to the formation of a descending change, with the cryptocurrency hitting lower highs and lower lows.
However, last Tuesday, the altcoin broke out of the bearish pattern. Since then, aside from two red candlesticks, HYPE has consistently posted daily gains, reinforcing the bullish momentum.
While the token trades above $16, CCN observes that the Chaikin Money Flow (CMF) trend has remained the same as its corrective phase. The CMF measures the level of accumulation (buying) and distribution (selling) around a cryptocurrency.
When the reading is positive, it indicates rising buying pressure. On the flip side, a negative CMF reading indicates the dominance of distribution.
Bullish Momentum Shows Up
As seen above, the CMF reading on the HYPE/USDT daily chart is down to -0.30. This suggests a bearish divergence, indicating that buying pressure may not be strong enough to sustain HYPE’s price rally in the long run.
However, in contrast to the CMF position, the Moving Average Convergence Divergence (MACD) showed otherwise.
On the same timeframe, the MACD, which measures momentum, turned positive. Besides that, the Exponential Moving Averages (EMA) on the indicator have also flashed bullish signs.
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Specifically, the 12 EMA (blue) has crossed above the 26 EMA (orange). Typically, when the shorter EMA rises above the longer one, the trend is bullish and is called a golden cross.
Meanwhile, if it plays out the other way around, the trend is bearish and tagged a death cross. Since it is the former, it appears that bullish momentum could push the HYPE token price higher.
But that will only be validated if the CMF reading improves.
HYPE Price Analysis: Next Movement Unclear
Given the diverging signals, CCN turns to Fibonacci levels to forecast potential price targets for HYPE. However, this analysis evaluates both bullish and bearish scenarios to provide a balanced outlook.
- Bull case: For HYPE to continue trending higher, other indicators need to follow the MACD movement. For instance, the CMF, which is currently negative, might overturn its downtrend especially since it is in the oversold region (reading > -0.20).
If this happens, sellers might take the back seat with buyers having the upper hand. If validated, the HYPE token price might hit $18.35 at the 0.618 Fibonacci level.
Once validated at this golden ratio, this could drive HYPE’s price higher with possible targets of retesting $22.23 at the 0.382 Fib level.
- Bear case: In validating a bearish situation for HYPE, the MACD upswing has to fade. In that circumstance, the 12 EMA also has to lay down its dominance against the 26 EMA.
Should that happen alongside selling pressure indicated by the CMF, HYPE could slip below the 0.786 Fib ratio. A decline such as this could lead to a loss of key support that has kept it in an uptrend.
If validated, the altcoin’s market value could slide to a swing low of $12.06. If selling pressure rises in this case, the value could drop to a single-digit.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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