Dragonfly Capital recently withdrew 25,989.71 Hyperliquid (HYPE) tokens, worth approximately $648,600, from the Bybit exchange. This move signals a deliberate shift toward self-custody rather than an immediate distribution to the market. While such actions at the entity level can indicate conviction, they do not necessarily reflect broad market accumulation. Large players often reposition assets for flexibility, risk management, or internal strategic reasons.
However, the bullish implications of this isolated withdrawal were undermined by a lack of supporting metrics and immediate price action. Despite the transfer, HYPE's price continued to weaken, failing to find stability. Market participants have not mirrored this behavior at scale, suggesting the move represents selective positioning rather than the start of a coordinated accumulation phase.
Spot flow dynamics have shifted sharply, altering the short-term supply picture. A previous session recorded $1.62 million in net outflows, briefly signaling reduced exchange supply and easing sell pressure. This trend, however, reversed quickly. The latest data shows a net inflow of +$538.75K, indicating tokens are moving back onto exchanges. Such inflows typically suggest preparation to sell rather than hold, implying sellers are regaining control after a short pause.
Price action confirms the bearish structure. HYPE failed decisively at the $28 resistance level, confirming seller dominance at higher prices. The rejection redirected the price toward the $25 support zone, which now appears increasingly fragile. If selling pressure continues, the next key downside level is $22, with prolonged weakness potentially opening a path toward $15 before any meaningful recovery.
Trend indicators reinforce this outlook. The Directional Movement Index (DMI) showed the -DI (negative directional indicator) at 24, holding above the +DI (positive directional indicator) at 17, signaling sustained seller control. The Average Directional Index (ADX) at 22 confirmed that bearish strength was building rather than fading.
Derivatives data adds another layer to the bearish setup. Open Interest (OI) fell by 7.91% to $1.31 billion, reflecting traders closing positions instead of adding exposure. During potential market bottoms, OI often rises as participants position for rebounds, but this pattern has not appeared. The decline in OI alongside a falling price typically signals position unwinding rather than aggressive dip buying, indicating leverage is leaving the market.
Liquidation data further reduces the odds of a reflexive rebound. Total liquidations stood near $1.94 million on the long side versus just $1.58K on the short side, highlighting an absence of short-side stress. On Binance, short liquidations were only $1.48K against $142.6K in long liquidations, while Hyperliquid's own venue saw $1.69 million in long liquidations with virtually no shorts wiped out. This imbalance suggests the market lacks the fuel for a squeeze-driven recovery, pointing instead toward controlled downside continuation.
With spot inflows returning, weak price structure, bearish trend indicators, unwinding leverage, and muted liquidation pressure, all major signals suggest sellers retain control. Unless flows flip decisively back to sustained outflows and traders rebuild exposure, HYPE appears vulnerable to further declines before any durable recovery takes shape.
