Hyperliquid (HYPE) Plunges 19%, Entering Oversold Zone as Bulls Look for a Reversal

Key Takeaways

• Breakdown from rising channel confirms bearish momentum
• Price approaching 0.618 Fibonacci support at $19.88
• RSI oversold, signaling a potential short-term bounce

Hyperliquid (HYPE) has experienced a sharp downturn after breaking down from a rising channel, now testing key Fibonacci support levels.

The Elliott Wave structure suggests that the corrective phase is ongoing, with a potential fifth wave decline yet to unfold.

Despite the bearish momentum, the RSI is oversold, indicating that a relief bounce could be near.

HYPE Price Analysis

The 4-hour chart reveals that HYPE completed a five-wave Elliott structure to a $35 high on Dec. 21 before undergoing a significant correction.

The price broke down, forming a descending channel formation, and is now in a corrective WXY structure.

Wave W initiated the first leg of the decline on Jan. 13, with Wave X acting as a temporary relief rally. The ongoing Wave Y is unfolding as an impulsive move, currently testing the 0.5 Fibonacci retracement level at $22.80. 

If bearish pressure persists, the next major support lies at $19.88, aligning with the 0.618 retracement.

The 4-hour Relative Strength Index (RSI) has entered the oversold region, historically indicating exhaustion in selling pressure.

However, there are no clear reversal signs, meaning the downward trajectory could extend towards $15.73 (0.786 Fibonacci level) if the $19.88 support fails.

A recovery attempt would require a decisive reclaim of $22.80 and a push above $25.72 (0.382 Fibonacci retracement), which could confirm a potential trend reversal. Until then, further downside risk remains dominant.

HYPE Price Prediction

The 1-hour chart provides a clearer look at the ongoing decline, which appears to be in the final stages of a five-wave impulse. Wave (iii) has completed its leg downward to $21, and a potential Wave (iv) relief rally could follow.

However, this corrective bounce is expected to face resistance near $22.80 before the fifth and final wave drives prices lower.

A measured move projection places Wave (v) near the 0.618 Fibonacci extension, which aligns with the $19.88 support zone.

Given the RSI’s prolonged oversold condition, a short-term bounce towards $22.80 is likely before the final drop towards $19 or lower.

If sellers continue to dominate, a more extended decline could push HYPE toward the 0.786 retracement level at $15.73, marking a deeper correction.

However, any signs of bullish divergence in the Relative Strength Index (RSI) could indicate the completion of this correction, setting the stage for a rebound.

Key Levels to Watch

• Immediate Resistance: $22.80 (0.5 Fibonacci retracement).
• Key Resistance: $25.72 (0.382 Fibonacci retracement).
• Immediate Support: $19.88 (0.618 Fibonacci retracement).
• Critical Support: $15.73 (0.786 Fibonacci retracement).
• Short-Term Target for Wave (v): $19.00–$19.88 range if the downtrend continues.
• Invalidation Zone: A break above $25.72 would invalidate further downside potential.

HYPE remains in a strong correction phase, with further downside likely unless buyers step in near key Fibonacci supports.

A temporary bounce may occur, but sustained recovery requires reclaiming lost resistance levels.