hyperliquid

#Hyperliquid #AsterDEX #lighter $

1. Contract Manipulation and Trust Crisis
In early 2025, HYPE maintained a relatively stable trend around 20u. By the end of March, the famous JELLYJELLY manipulation incident erupted. Someone opened a short position of about 6 million USD, which led to a significant increase in the JELLY price on the on-chain spot market (from 0.0095u to 0.06u), causing their position to be forcibly liquidated and transferring the losses to liquidity provider HLP (Hyperliquidity Provider). This incident threatened the safety of the HLP fund pool, and the validator network of Hyperliquid forcibly delisted the JELLY perpetual contract through on-chain voting, fixing the settlement price at 0.0095u (instead of the market price of 0.50u). This intervention triggered a severe credibility crisis at the time, with the market questioning the authenticity of its decentralization, leading to the coin price plummeting from its peak to 9u. Generally, intervention often signifies the bankruptcy of the exchange's credibility, resulting in a prolonged slump in coin prices.

Hyperliquid Strategies Inc. (PURR), listed on NASDAQ, recorded a net loss of $317.9 million for the six months ended December 31, 2025, primarily driven by unrealized losses on its holdings of HYPE tokens, deferred tax expenses, and write-offs related to the merger. The company reported total assets of $616.7 million and shareholder equity of $589.8 million, with no outstanding debts. As of December 31, it held approximately 12.86 million HYPE tokens at a price of $25.48.

At the time of writing on Thursday, Hyperliquid (HYPE) has lost a key technical support level after slipping below its 50-day Exponential Moving Average (EMA) at $28.85, posting an intraday decline of nearly 1%. The breakdown of this short-term moving average — while it remains positioned below the 200-day EMA at $32.75 — reinforces the view that the broader market structure is currently tilted in favor of sellers.
The 50-day EMA had been acting as a dynamic support zone throughout recent consolidation. A daily close below this level would confirm a short-term bearish continuation pattern and increase the probability of a deeper corrective move.
Downside Levels to Watch
If HYPE confirms a daily close beneath $28.85, the next significant support sits around $23.58 — the December 21 swing low. This level previously triggered a strong reaction and may attract renewed demand.
Should selling pressure intensify further, the $20.82 zone — corresponding to the October 10 low — becomes the next major defensive line. A breakdown below that region would significantly weaken the medium-term structure and shift sentiment decisively bearish.
Volume behavior will be critical. A rise in selling volume accompanying the breakdown would validate bearish conviction, while low-volume weakness could signal temporary exhaustion rather than structural damage.
Technical Indicators Reinforce Bearish Bias
Momentum indicators are aligning with the downside scenario:
MACD (Moving Average Convergence Divergence) on the daily chart has turned lower and formed a bearish crossover earlier this week. The histogram continues expanding in negative territory, reflecting accelerating downside momentum.
RSI (Relative Strength Index) has retreated to 48 and moved below the neutral 50 threshold after exiting overbought territory. This suggests fading buying strength and leaves room for additional downside before reaching oversold conditions.
Together, these indicators suggest that sellers currently maintain control, and short-term rallies may face resistance unless momentum shifts decisively.
What Would Invalidate the Bearish Scenario?
A recovery and daily close back above the 50-day EMA at $28.85 would ease immediate downside pressure. In that case, HYPE could attempt a rebound toward the 200-day EMA at $32.75, which now acts as major overhead resistance.
A sustained break above the 200-day EMA would be required to reestablish bullish structure and potentially open the path toward the $35–$38 liquidity zone.
Long-Term Strategic Trade Scenarios (Risk-Managed Approach)
The following scenarios are hypothetical strategic examples based on technical structure and risk management principles — not financial advice.
Bullish Reclaim Scenario (Long-Term Positioning)
Entry (Buy): Above $29.20–$29.50 after confirmed daily close back above 50-day EMA
Target 1: $32.75 (200-day EMA)
Target 2: $35.50
Target 3 (extended): $38.00
Stop Loss: Below $26.80 (structure invalidation level)
Rationale: Waiting for confirmation reduces false breakout risk and aligns with momentum recovery.
Bearish Continuation Scenario (Long-Term Swing Short)
Entry (Sell): On confirmed daily close below $28.50
Target 1: $23.58
Target 2: $20.82
Extended Target: $18.50 (if broader market weakness accelerates)
Stop Loss: Above $30.20
Rationale: Breakdown below dynamic support with bearish momentum continuation.
Market Outlook
HYPE is currently at a technical crossroads. The loss of the 50-day EMA shifts short-term bias bearish, while the 200-day EMA overhead limits upside recovery attempts. Momentum indicators favor caution, and price action around $28.85 will likely determine the next multi-week direction.
As always, traders should combine technical analysis with proper risk management and remain aware of broader market conditions, especially in high-volatility digital asset markets.
This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research and assess your risk tolerance before making trading or investment decisions.
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