HYPE sheds 18% in one week: will it retest the $27 support level?

HYPE, the native coin of the Hyperliquid DEX, has lost 18% of its value since hitting its yearly high of $38 last week.

It has now dropped below $30 and could record further losses as the broader market continues to underperform

The derivatives data further support this bearish sentiment, with rising short bets while funding rates remain positive

HYPE dips below $30 as traders battle with mixed signals

Hyperliquid has lost 6% of its value in the last 24 hours, making it the worst performer among the top 20 cryptocurrencies by market cap.

The bearish performance comes as Hyperliquid’s derivatives data shows mixed signals.

Data obtained from CoinGlass shows that HYPE’s long-to-short ratio currently reads 0.91.

The ratio declining below one reflects bearish sentiment in the market, with more traders betting on HYPE’s price falling over the next few hours or days

However, the funding rates support a bullish bias. HYPE’s OI-Weighted Funding Rate data shows that the number of traders betting that the price of HYPE will slide further is lower than those with bullish bets

The metric turned positive on Saturday and currently reads 0.0033%, indicating that longs are paying shorts.

Usually, when the funding rates have flipped from negative to positive, Hyperliquid’s price has rallied sharply.

Will HYPE retest the $27 support level?

The HYPE/USD 4-hour chart remains bearish as Hyperliquid has lost 18% of its value in the last seven days.

The coin has been trading sideways between the 100-day Exponential Moving Average (EMA) at $30.77 and the daily resistance at $36.51 since the beginning of the month.

At press time, HYPE is trading below the consolidating boundary at $30.77.

If the daily candle fails to close above the 100-day EMA at $30.77, HYPE could record further losses in the near term, with the $26.85 resistance level a likely target.

An extended bearish condition will see HYPE dip towards the January 25 low of $21.

The momentum indicators currently support a bearish bias. The Relative Strength Index (RSI) on the 4-hour chart is 37, pointing downward toward the oversold level, indicating fading bullish momentum

The Moving Average Convergence Divergence (MACD) is showing a bearish crossover on Tuesday, adding further confluence for the short traders

However, if the daily candle closes above the 100-day EMA of $30.77, HYPE could rally higher towards the $36.51 resistance level.

It would need the help of the broader cryptocurrency market if it intends to extend its rally toward the 61.8% Fibonacci retracement level at $44.46.

Currently, HYPE’s momentum indicators are bearish, supporting further selloffs.

The broader crypto market also remains bearish, with Bitcoin failing to overcome the $72k efficiency level over the weekend.

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