Hyperliquid (HYPE) Price on Track for $35 Rally Despite Losing $2B in TVL

Key Takeaways

• Hyperliquid TVL has fallen to $1.27 billion, but the token’s price has bounced off its recent lows.
• The support at $24.50 appears to have resisted another downtrend after the initial price drop.
• Technical indicators now suggest a potential rally toward a new high if buying pressure continues.

Hyperliquid, the decentralized perpetual exchange, did not escape the chaos that rocked the crypto market on Feb. 3. As the market endured one of its worst liquidations ever, the DeFi protocols suffered a steep crash in Total Value Locked (TVL).

Like the TVL,  the price of HYPE, the native token of the protocol, also experienced a drop to $22.30. However, in the last 24 hours, HYPE’s price has slightly recovered, gaining 10% and reclaiming $25 in the process.

But it is not the same for Hyperliquid’s TVL. Despite the drop, this analysis reveals that the altcoin will likely display strength and resist another downturn.

Less Capital Deployed, but Selling Pressure Reduces

According to data from DeFiLlama, Hyperliquid’s TVL was over $3 billion on Dec. 17, 2024. The TVL measures the total capital users have deposited into a protocol’s smart contracts for staking, lending, or providing liquidity.

When the value increases, it indicates user confidence in the yield the protocol can produce and an increase in more funds deployed.

But as of this writing, the project’s TVL has cratered to $1.27 billion, meaning that the metric has dropped by approximately $2 billion.

The decline here implies that users have withdrawn a chunk of their assets from the protocol. Such a fall happens because of deeper issues like security concerns or diminishing returns.

However, it is important to note that the HYPE’s price and TVL do not correlate strongly. Sometimes, the values follow the same direction. Other times, they diverge.

In this case, it is the latter, with technical indicators showing that the token’s value could trade higher in the short term.

One indicator supporting this thesis is the Chaikin Money Flow (CMF) in the 2-hour timeframe. Between Feb. 1 and 2, the CMF, which measures the level of accumulation and distribution, dropped to the negative region.

The decline over the weekend represented rising selling pressure around HYPE’s price and impacted its previous drawdown.

But today, the CMF has climbed to the positive region, indicating that buying pressure has outpaced the selling volume. Furthermore, CCN observed that bulls had mounted support at $24.50.

The last time HYPE had such strong support, the value almost hit $30 after a 15% rally. Therefore, if the pattern rhymes, the token’s value might rally to this level soon.

HYPE Price Forecast: Higher Values Next

Assessment of the daily chart also seems to align with the bias of the 2-hour chart.

As seen below, HYPE has formed a rounding bottom, implying that the altcoin might gradually increase over time. If sustained and HYPE rises above the neckline at $26.27, then a breakout could be next.

Using the Fibonacci sequence levels, should HYPE hit the price mentioned above, this might lead to breaking above the resistance at $28.42. Once cleared, HYPE’s price will likely jump to $35.46 and mark a new all-time high.

However,  if the token fails to rise above the neckline or 0.786 Fibonacci level, this prediction might not come to pass.

Instead, HYPE might decline to $19. If selling pressure intensifies like it did during the last market crash, the price might drop as low as $15.11.