HYPE crypto price has pulled back in the past few months, moving from a record high of $60 in September to the current $25.8, a 56% retreat. Hyperliquid’s token has also formed numerous risky patterns, pointing to more downside in the near term. 

HYPE crypto price technicals points to more downside

The daily timeframe chart shows that the HYPE crypto price has dropped in the past few months. This retreat happened after it peaked at $60 in September. It retreated after forming a head-and-shoulders pattern, a common bearish reversal sign.

The token has dropped below the 61.8% Fibonacci Retracement level at $28.5, confirming the bearish outlook. It has also dropped below all moving averages, a sign that bears remain in control for now.

Hyperliquid price has also formed a bearish flag pattern, which is made up of a vertical line and an ascending channel. This pattern often leads to more downside. It also remains below the Supertrend indicator. 

Therefore, the most likely HYPE price forecast is bearish, with the next target being at $20. This target is about 22% below the current level. On the other hand, a move above the key resistance level at $28 will invalidate the bearish outlook.

Hyperliquid’s perpetual DEX is facing stiff competition

HYPE price chart | Source: TradingView The main reason why the HYPE crypto price has crashed in the past few months is that Bitcoin and other altcoins have been in a strong downtrend. Bitcoin has dropped from the year-to-date high of $126,200 in October to the current $95,000. Other top altcoins like Ethereum and Cardano have all slumped. 

Meanwhile, key Hyperliquid metrics have deteriorated in the past few months, partly because of the ongoing crypto market crash and the rising competition in the perpetual futures market.

Data compiled by DeFi Llama shows that the volume in the perpetual futures market has dropped from last year’s high of $1.32 trillion in October to this month’s $521 billion.

Hyperliquid’s volume has dropped from a high of $396 billion in August to this month’s $94 billion. As a result, its monthly fees have tumbled to $36 million, down from last year’s high of $144 million.

More data shows that competition in the network has continued rising, with most of it coming from Aster, Lighter, and Grvt. Aster network handled over $123 billion in the last 30 days, while Lighter’s volume was $118 billion. 

Grvt handled $40 billion, and Hyperliquid processed transactions worth over $145 billion. In the past, Hyperliquid was the most dominant player in the industry.

Hyperliquid’s metrics have deteriorated in the past few months. For example, the total value locked (TVL) in its layer-1 network has plunged to $2.65 billion from the all-time high of $8.35 billion. Also, the stablecoin supply in the network has dropped to $4.9 billion from the all-time high of $6.2 billion.

All these metrics have affected the number of HYPE token buybacks and token burns. That is because the network uses its fees to burn HYPE tokens and repurchase them, which helps to reduce the supply.

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