The native token of the Hyperliquid decentralized exchange, HYPE, is showing signs of recovery, climbing back to the critical 200-day Exponential Moving Average (EMA) after three straight days of gains. At the time of writing, HYPE is up 3% on Monday, with technical indicators pointing to a decline in selling pressure.
However, this price recovery contrasts sharply with declining user activity on the Hyperliquid platform, indicating a lack of the trader demand necessary for a sustained price boost.
Decline in Network Activity Sparks Concern
Hyperliquid's network statistics reveal that traders are pulling back following the cryptocurrency market's October 10 flash crash, which resulted in $19 billion in liquidations across the broader market.
- Open Interest (OI) Plunge: The total OI on the platform—the notional value of all open contracts—has dropped over 50%, falling from $15.10 billion on October 9 to $7.20 billion on Friday. This massive decline signals a "risk-off" sentiment that could hurt demand for HYPE.
- User Outflows: Consistent outflows last week have caused cumulative inflows to drop to $4.50 billion, corroborating the slump in user activity.
Assistance Fund and Retail Interest Offer Support
Despite the overall network decline, two factors are providing support for HYPE:
- Assistance Fund Buyback: The Hyperliquid Assistance Fund has acquired 33.53 million HYPE tokens, valued at over $1.29 billion. This revenue-based buyback reduces circulating supply, signaling internal confidence, and is designed to boost demand.
- Retail Interest: Retail traders are anticipating a recovery. CoinGlass data shows HYPE's OI is up 2.45% in the last 24 hours, suggesting traders are increasing their leverage or building new long positions.
Technical Outlook: Bulls Target $48
Technically, HYPE's recovery is significant as it has reclaimed the 200-day EMA above $38.
- Immediate Target: A decisive close above the 200-day EMA could lead to the next resistance level, the 100-day EMA at $43, followed by the Pivot Point at $48.
- Momentum Indicators: Momentum is shifting: the Moving Average Convergence Divergence (MACD) is recovering towards its signal line, and the Relative Strength Index (RSI) is rising from the oversold zone (currently at 42), both suggesting waning bearish strength and a potential confirmation of renewed bullish momentum.
- Downside Risk: If HYPE fails to hold above the $38 200-day EMA, it risks slipping to the lower support level at $28.
October 2025, Cryptoniteuae