Hyperliquid Explodes by 14% as Trading Volumes Reach $1 Trillion – How High Can HYPE GO?

An incident involving a single trader who lost $4 million in an ETH trade after they pulled out a portion of the margin that was supposedly covering the position prompted the developing team to review the platform’s margin requirement.

Trading volumes for HYPE have retreated by 3.4% in the past 24 hours and currently account for just 3% of HYPE’s circulating supply.

Hyperliquid is a trading platform that offers access to perpetual contracts to trade a large number of cryptocurrencies and pairs. They have grown to the point that they are now direct competitors to centralized exchanges (CEX).

The platform’s competitive edge lies in that it operates through smart contracts minted in a proprietary blockchain rather than relying on third-party infrastructure. They also charge zero gas fees and competitive commissions per trade.

For example, for market orders, they charge 0.035% while the commission is slightly higher at 0.01% for limit orders.

According to DeFi Llama, the protocol’s total value locked (TVL) currently stands at $430 million. This makes Hyperliquid the 69^th largest decentralized protocol according to this website’s ranks.

HYPE Has a Long Road Ahead to Recover from Its Losses

Despite today’s uptick, HYPE has not escaped the bear market as it has accumulated a 42% loss since the year started.

This token was one of the largest and most successful crypto airdrops of the year. A total of $7.5 billion worth of HYPE was allocated back in January, with 28% of the token’s allocation going to early users.

Despite HYPE’s limited price history, the daily chart from Pyth Network shows that the token is bouncing off a key support today at $12.

So, apart from the news that they shared just hours ago, a tag of this support could also be aiding its positive performance in the past 24 hours.

However, HYPE remains in a sharp downtrend that seems quite difficult to overturn unless the price rises by at least 50% in the next few weeks.

The most critical resistance level at this point is found at around $21. With market sentiment being so heavily depressed at the moment, it seems highly unlikely that HYPE will achieve this feat in a short period.

For now, bulls would have to be satisfied with whatever they can get from these technical bounces and supportive news.

HYPE Needs to Break Above Two Resistances to Keep the Rally Going

As we head to the hourly chart, we can see that HYPE is hitting a key resistance at around $14.2 per token and has another one waiting at $14.7 if it manages to jump above this first obstacle.

If today’s uptrend spills over and accelerates during the American session, a plausible entry price would be at around $14.5 once the price breaks above that first key resistance. Traders could set a stop loss below that level to maximize their risk-reward ratio. This long position would offer a 1.8 RR ratio if the exit price is set at around $15.4.

Momentum indicators are favoring a bullish outlook as the Relative Strength Index (RSI) stands above the signal line and has been on an uptrend for nearly 24 hours.

However, the MACD’s histogram shows that positive momentum is decelerating, so traders should keep their stop price tight to avoid getting caught up in a trend reversal if it happens during the American session.