Hyperliquid (HYPE) extended its weekly decline on Thursday, retreating toward the 50-day Exponential Moving Average (EMA) near the $28.85 level. The move marks a nearly 10% correction since the start of the week, with bearish momentum building amid weakening derivatives demand.
The 50-day EMA is now acting as a critical technical “defensive line,” widely monitored by traders to assess short-term trend direction. A sustained hold above this dynamic support could stabilize price action, while a decisive breakdown may open the door to deeper retracement levels.
Derivatives Data Signals Cooling Speculative Demand
HYPE — the native token of the decentralized perpetual futures exchange Hyperliquid — is showing signs of fading retail enthusiasm. According to data from CoinGlass, open interest (OI) in HYPE futures contracts declined approximately 2% over the past 24 hours, falling to around $1.34 billion.
A decline in OI typically indicates that traders are closing positions, either voluntarily reducing exposure or being forced out through liquidations. In the current environment, the drop suggests a combination of deleveraging and cautious positioning as market conditions turn less favorable.
At the same time, liquidation data highlights a clear imbalance. Long positions worth approximately $3.07 million were liquidated within the same 24-hour window, significantly exceeding the roughly $228,950 in short liquidations. This sharp disparity suggests that bullish traders have faced aggressive pressure, contributing to downside acceleration.
The long-to-short ratio has fallen to 0.9037 — below the neutral threshold of 1 — indicating that short positions now slightly outweigh longs. While not an extreme reading, the shift reflects a growing defensive tone among derivatives participants.
Technical Structure at a Crossroads
From a chart perspective, HYPE’s retracement toward the 50-day EMA places the token at a technical inflection point. The level has historically served as dynamic support during prior pullbacks within broader uptrends. A strong bounce from this zone could signal that the correction is merely a consolidation phase.
However, if price closes decisively below the 50-day EMA with increasing volume, it may confirm short-term trend weakness and shift momentum toward lower support zones.
Momentum indicators have also cooled compared to earlier in the rally cycle, reflecting declining buying intensity. Combined with shrinking open interest and long liquidations, the data suggests that leveraged bullish positioning has been partially flushed from the market.
Retail Sentiment Under Pressure
The current structure reflects tightening conditions for smaller traders who tend to use leverage in perpetual futures markets. As liquidation pressure increases and volatility rises, risk appetite often contracts, reinforcing short-term bearish bias.
While this does not necessarily invalidate Hyperliquid’s broader ecosystem growth narrative, it underscores how derivatives-driven price action can amplify short-term swings — particularly in tokens closely tied to trading activity.
For now, market participants are closely monitoring whether HYPE can defend the $28.85 support region. The reaction at this level may determine whether the token stabilizes or enters a deeper corrective phase.
This article is for informational purposes only and does not constitute investment advice. Readers should conduct independent research and carefully assess risks before making financial decisions.
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