Is the HYPE Fading? Hyperliquid’s 25% Rally Faces a Reality Check

Hyperliquid has emerged as one of the strongest performers in the crypto market. While Bitcoin is down nearly 28% and Ethereum has fallen around 40%, HYPE is up about 25% over the past month and nearly 10% in seven days. Even in the latest session, the Hyperliquid price has gained close to 3%. However, behind this outperformance, multiple technical and derivatives indicators suggest that the rally may be losing internal strength. Failed breakouts, weakening volume, and rising leverage risks are now putting the sustainability of Hyperliquid’s move under pressure. Buying Strength Weakens As Sellers Come Back Into Play Despite recent price strength, spot market participation is starting to weaken. On the daily chart, HYPE recently pushed toward the $36 zone but failed to sustain the bull flag breakout. The latest candle printed a long upper wick near this level, showing that sellers stepped in aggressively. This rejection indicates a growing supply (sellers) at higher prices. At the same time, On-Balance Volume (OBV) has been trending lower between January 28 and February 5, even as the price continued moving higher. OBV is a volume-based indicator that tracks buying and selling pressure. Weakening OBV: TradingView Want more token insights like this? Sign up for Editor Harsh Notariya’s Daily Crypto Newsletter here. This divergence suggests that fewer spot buyers are supporting the rally. In simple terms, price is rising, but real demand is fading. Momentum indicators are flashing similar warnings. Between January 28 and February 4, the Hyperliquid price formed a higher high, while the Relative Strength Index (RSI), a momentum indicator, printed a lower high. This bearish divergence, sellers gaining control, was followed by a drop toward $31 before buyers returned. A similar structure is now forming again. Price is attempting to push higher, but RSI is failing to confirm the move and is shaping another lower high. This divergence is not yet fully confirmed. However, ...