Hyperliquid (HYPE) Explodes by 20% in a Day but Red Flags Appear

Hyperliquid’s native token has stolen the show from the larger-cap alts, rocketing by over 20% at one point to its highest price level since last October at $47. On this impressive way up, the token added roughly $2 billion to its market capitalization and neared the top 10 alts by that metric.

Coinbase appears to be the most likely candidate for the biggest contributors to this surge after announcing that it had expanded support for USDC on Hyperliquid by becoming the official treasury deployer of the stablecoin under the DEX’s Aligned Quote Asset (AQA) framework.

21Shares’ HYPE ETF debuted earlier this week, which was also a positive development, while another one is set to launch today from Bitwise.

In addition, the US Senate Banking Committee voted to advance the Digital Asset Market Clarity Act, which gave the entire crypto market a notable price push.

The Warning Signs

Ali Martinez was among the first analysts to weigh in on HYPE’s massive surge. As he usually does, he based his X post on the TD Sequential, a metric used to determine whether the underlying asset has exhausted its move in either direction.

Martinez noted that the indicator had caught HYPE’s rebound from $22 to $44 over several months but has now flashed a major sell signal. It could lead to some profit-taking and perhaps drive the asset south to $36 or even $33.

Crypto Patel shared a similar opinion and warned traders to be wary of potentially getting “caught on the wrong side of HYPE.” The analyst believes that if the token fails to overcome $46, the roadmap looks quite painful:

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▪️ $33 → First Meaningful Reaction

▪️ $30 → Where I’m Actually Interested (Bullish OB + 0.5 Fib Confluence)

▪️ $27 → Golden Pocket, Deeper Liquidity

▪️ $24 → The Floor I Don’t Expect To See, But It’s There

However, Patel added that if HYPE manages to break past $50, then this model will be invalidated, and they will flip their own view.

The 20/80 Ratio

Fellow analyst GA Crypto was also cautious, but also outlined a specific 20/80 ratio regarding HYPE’s potential to post a new all-time high. They noted that there’s a 20% chance of surging past $59, which was the peak reached last September, and an 80% probability “to go down and grab lower liquidity.”

They warned investors to be careful when interacting with tokens that have experienced such dramatic price increases in a relatively short time period.