Hyperliquid Unlock Has Finally Taken Place. How Will It Affect Price?

Hyperliquid dropped to a low of $56 on Saturday and currently trades down by over 5%. It has shed yet another figure after it bled in the previous session.

It lost a whopping 7% and dropped $57. The latest decline is also minuscule compared to Thursday’s, when it lost almost 14%. Summing it up, the current session marks its third consecutive red.

Hyperliquid is currently grappling with notable selling pressure at the time of writing. It broke the illusion that recovery is near and approaches its fourteen-day low.

The decline over the last two days was due to the bearish sentiment across the crypto market. Following the trend, some HYPE proponents also dumped some of their bags. One such was Arthur Hayes, who sold 247,334 units ($18 million at the time), and another 85,714 a few hours later.

Summing it up, the over 333k units Hayes sold contributed to the massive 14% decline on Thursday. His action also indicates that other large bag holders are trimming their holdings.

One analysis also highlighted another reason for the latest downtrend. The Hyperliquid team announced a massive token unlock, which is 2.54% of the total supply. If the team went through with the release, the market will grapple with $675 million worth of excess supply.

The schedule was in June, and the article warned of massive price declines if the unlock happens. The project’s team went through with the release, which may explain the almost 6% decline on Saturday. However, there is a twist. A recent report noted that the team’s committed claim was only $38 million.

This means that instead of 2.54% of the circulating supply, they released only 0.24%. In effect, the feared unlock didn’t play out as many anticipated.

What Will Hyperliquid Do Next?

While the unlock is not as significant as anticipated, Hyperliquid may continue to retrace.

Previous price movement pointed to $56 as a key level to watch.  However, recent price action suggests that it will fail. If that happens, $54 is almost inevitable. Previous movement also favors this key level as the asset rebounded off it on several occasions.

The Fibonacci retracement level hints at the bulls staging a rally around $54, as it is close to the 61% fib level. Having lost the 50% mark, there is notable demand concentration at the 61% level, which may lead to a strong rally.

Nonetheless, derivatives data shows that traders are preparing for an even steeper decline. Long positions are currently piling between $54 and $50, with the highest cluster at $50. This means that the likelihood of a slip to below the $52 sell zone is high.

The relative strength index also supports this assertion as it’s been above 70 for an extended period, indicating that HYPE is overbought. It is currently at 47. While this is a neutral zone, previous movement suggests the metric will rebound around 40.

The 200 moving average provides added reasons to expect a drop below $50. Since January, the metric has served as a critical support. This time may be no different, as it sits at $49.6.

In other news, traders lost over $10 million in the last 24 hours. The liquidated longs accounted for over 70% of the total rekt positions. However, the lost funds on Saturday were significantly lower than those over the last two days, when an average of $41 million was rekt.

The post Hyperliquid Unlock Has Finally Taken Place. How Will It Affect Price? appeared first on CoinTab News.