HYPE Drops 6% to $46: Trend Reversal or Hidden Buy Signal for the Bulls?

Hyperliquid (HYPE) has pulled back to $46, down 6% in the last 24 hours. The weekly performance remains slightly positive, showing a 2% gain. Trading volume continues to be strong, with over $647 million recorded in the same period.

Meanwhile, this recent drop follows a period of upward movement, raising questions about whether current price action marks a short-term correction or the start of a deeper decline.

Price Pulls Back Into Key Zone

HYPE is now sitting near the top of a known demand area between $43 and $45. This zone has acted as support multiple times in the past. The price recently lost the 50-day exponential moving average, which is now at $47, confirming pressure from the downside.

A recovery from this range could lead to a retest of $51. If that resistance is cleared, a continuation toward $60 becomes possible. However, if buyers fail to defend this zone, the next level of interest sits lower at $36. A break toward that level would suggest a full shift in trend.

Source: TradingView

Notably, the Relative Strength Index is currently at 45. This reading shows weak momentum, with the RSI below its signal line and far from the neutral 50 mark. Conditions are not oversold, but demand appears limited at this stage.

Lower High Signals Weakness

On the 12-hour chart, the price was rejected near $52. This area has acted as resistance in the past and continues to limit upside attempts. A lower high has now formed, reinforcing signs of a shift in market direction.

Market analyst Sjuul from AltCryptoGems posted,

This follows the earlier drop below support in late September, which marked the first lower low. A lower high after a lower low often points to a changing trend, where sellers begin to take control.

Net Outflows Spike: Selling Over?

According to recent exchange data, HYPE recorded a net outflow of $3.31 million on October 7. This activity happened as the price dropped from around $53 to $46.

Large outflows often suggest that traders are moving tokens off exchanges—an activity usually associated with reduced selling pressure. Over the past few weeks, outflows have increased again after a brief return of inflows, pointing to a cautious mood in the spot market.

Source: Coinglass

While price action has weakened, several high-value wallets continue to hold large positions. Blockchain analytics platform Nansen shared that over 50 known smart traders are still holding more than $60 million in HYPE. The top wallet controls $18.2 million worth.

Trading activity also remains elevated, with HYPE still leading in perpetual open interest. According to Nansen,

Despite the pullback, larger players have yet to exit in size.

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