Hyperliquid's HYPE token is approaching a critical technical juncture as it nears a key neckline support level around $29.69, following the formation of a broad rounding top pattern that has developed over several months. This pattern, highlighted by analyst Ali (@ali_charts), signals weakening buyer momentum and a transition from upward expansion to controlled distribution.
The current price represents a 24-hour decline of 3.73%, with the token having breached a recent lower low of $29.15 on December 9th. The rounding top formation shows progressively weaker highs since late summer, indicating buyers have struggled to maintain upward momentum. The repeated testing of the neckline support in the low-$31 region has reduced its reliability, and a breakdown could trigger a move toward projected lower support zones between $20 and $16, based on measured move techniques.
Derivatives data reinforces the bearish outlook. Trading volume has dropped sharply by 26.28% to $984.15 million, indicating reduced market participation during this period of stress. The aggregated long/short ratio of 0.8382 shows short dominance, while liquidation data reveals $4.19 million in long liquidations over 24 hours compared to only $33.23K in short liquidations, reflecting failed attempts to support price during intraday rallies.
Despite a 24.1% price bounce from $29.15 to $36.17 at the beginning of December, the overall structure remains firmly bearish with a series of lower highs and lower lows on the daily chart since October. The Directional Movement Index (DMI) confirms a strong bearish trend in progress, and the Chaikin Money Flow (CMF) below -0.05 signals strong capital outflows. Fibonacci extension levels based on last month's swing from $50.16 to $29.15 point to a next bearish target at $24.19.
Market participants are also monitoring monthly token unlocks, with 10 million HYPE released at the end of each month. According to Delphi Digital analyst Jason, it will likely take several months of these unlocks to fully appreciate the potential selling pressure magnitude. While whale purchases have been noted, overall market sentiment remains cautious.
For bulls to reverse the downtrend, they would need to drive a rally beyond $36.17, which analysts consider unlikely given the current structure and capital outflows. The higher timeframe bearish trend takes precedence over the current bullish momentum seen on the 1-hour chart, where key short-term resistances sit at $29.89 and $30.68.
