Key Insights:
- Hyperliquid (HYPE) dropped to $24.71 on December 18 as technical analysts mapped critical support levels between $20 and $23 for the HYPE price.
- The decline occurred as validators prepare to vote on a $1 billion Assistance Fund burn that could reshape HYPE price dynamics through year-end 2027.
- Whale addresses deposited $37.1 million in stablecoins to accumulate HYPE at lower prices, signaling institutional confidence despite the sharp correction.
Hyperliquid technical analysis pointed to support zones between $20 and $23.86 as the HYPE price searched for a bottom, with four traders identifying different bounce levels within this range.
At the same time, whale addresses deposited $37.1 million in stablecoins to accumulate HYPE at lower prices, signaling confidence despite the sharp correction.
Technical Analysts Map Support Zones for Hyperliquid Crypto
Trader Altcoin Sherpa outlined two potential entry strategies on December 17, with the first involving a scalp long from current levels toward $27-$28, while the second targeted a swing long in the $23-$20 region where substantial liquidation clusters existed.
Sherpa noted liquidation clusters existed in the lower range and viewed the area as attractive if Bitcoin (BTC) stabilized, calling the move inefficient and expecting a bounce soon based on historical patterns.
The analyst referenced previous HYPE price action at $9, noting that the bottom took several weeks to develop. He expected similar consolidation before the next leg on Hyperliquid, given the pattern of accumulation phases preceding major moves.
Trader Nigma published a chart with descending targets on the same day, showing potential downside to $21.45. While no commentary accompanied the chart, the support lines indicated that level as a potential reversal point.
TraderSZ identified closer support at $23.86, which represented the next major footing where price action would need to hold above that threshold to avoid deeper correction into the lower target zone.
Trader Nebraskangooner identified a head-and-shoulders pattern, with the neckline break projecting a measured target of $20, suggesting the HYPE price could test that psychological level as the technical setup played out over the coming sessions.
Hyperliquid Supply Dynamics Create Dual Pressure
The HYPE price correction unfolded as supply debates intensified, with a validator vote on the Assistance Fund burn running through December 24 to formalize the removal of 37 million HYPE tokens from circulation.
The AF mechanism converts 99% of trading fees into buybacks, with those tokens sitting at an inaccessible system address, and the vote codified what markets already priced in as permanent removal.
Hyperliquid generated approximately $874 million in fees year-to-date, with nearly all of it going into the buyback loop, bringing the AF to roughly $1 billion at recent prices.
Analysts noted the burn represented 10% to 13% of the circulating supply. Yet markets reacted with a brief bounce before making new lows, a pattern suggesting traders viewed the change as accounting clarity rather than new scarcity.
The real supply pressure came from contributor unlocks, with approximately 237 million HYPE vesting over 24 months starting in November 2025, translating to 10 million tokens per month through late 2027.
Early unlock tranches showed on-chain activity, with the first releases in November seeing hundreds of thousands sold OTC, causing the HYPE price to fall 17% below $30 after those transactions hit the market.
The December 29 unlock loomed as the next scheduled release, with core contributors holding the majority of this allocation while Hyperliquid Future Emissions and Community Rewards tokens remained separate from this vesting schedule.
HYPE Whale Accumulation Signals at Key Levels
Major wallets are positioned for potential bounces despite the downward pressure, with on-chain data showing three significant deposits on December 17 totaling over $37 million in fresh capital.
The profile focused on on-chain data Lookonchain noted that address 0x5Ae4 moved 20 million USDC onto the platform with limit buy orders sitting at $15. This placement suggested expectations for a deeper correction before accumulation.
Wallet 0xE867 deposited 10 million USDC to add more tokens while already holding 926,488 HYPE worth $22.4 million, signaling continued accumulation on Hyperliquid and long-term conviction despite near-term volatility.
A third address, 0x23Af, transferred 7.1 million USDC to purchase 277,420 HYPE at an average of $25.60, with the buy occurring above current levels and demonstrating willingness to accumulate during the drawdown.
The whale activity clustered around the $20-$26 range, aligning with technical support zones identified by traders, and combined buying power totaled $37.1 million in fresh capital ready for deployment at lower levels.
The market structure featured competing forces: monthly unlocks provide a steady supply, while protocol buybacks permanently remove tokens, and the AF burn vote aimed to clarify this dynamic for institutional investors evaluating the tokenomics.
The contributor vesting schedule extended through November 2027, and at approximately 10 million tokens per month, it represented significant float expansion from earlier price peaks.
The current HYPE price of $24.71 sat 60% below the all-time high, with technical support levels between $20 and $23 representing 20% to 30% additional downside, where traders positioned for bounces from those thresholds.
The question now is whether the market will provide a structure that allows a bounce in the HYPE price.
Source: https://www.thecoinrepublic.com/2025/12/19/hyperliquid-tanked-to-24-as-whales-secretly-deployed-37-1m-eyeing-4-key-support-levels/
