Is HYPE entering a bear market after a 10% weekly decline?

Bitcoin has dropped below $80,000 once again, while Ethereum failed to defend the $2,300 resistance level.

$HYPE, the native coin of the Hyperliquid DEX, is down by 3.6%, making it the second-worst performer among the top 10 cryptocurrencies by market cap.

It is currently trading at $38 after closing below the rising trendline earlier this week. Mixed signals from the derivatives markets put a lid on $HYPE’s recovery.

If the bearish trend persists, $HYPE could likely aim for the support level around $37 in the near term.

Mixed sentiment keeps $HYPE bearish

$HYPE has been underperforming over the past few days, losing 10% of its value in the last seven days.

The bearish performance comes amid mixed sentiment from retail investors. Data obtained from CoinGlass shows mixed signals, keeping the bulls cautious.

The long-to-short ratio for $HYPE reads 0.70 on Thursday, the lowest level over a month.

This ratio, being below one, reflects bearish sentiment in the market, as more traders are betting on the asset’s price to fall.

However, the funding rates support a positive sentiment among traders.

CoinGlass’ OI-Weighted Funding Rate data for $HYPE flipped positive on Wednesday and reads 0.0078% on Thursday.

This metric being positive indicates that longs are paying shorts, projecting a bullish sentiment.

The combination of these two derivative metrics suggests indecision among $HYPE investors and a lack of clear directional bias.

This could keep $HYPE low, affecting its chances of a sustained recovery.

Hyperliquid price forecast

Similar to other leading cryptocurrencies, the $HYPE/USD 4-hour chart is bearish thanks to its recent poor performance.

$HYPE’s price broke and closed below the rising trendline earlier this week, losing 7% of its value in the last two days.

At the time of writing on Thursday, $HYPE is extending the correction, trading below $39.

If the bearish trend continues, the bears could push the price below the 200-day Exponential Moving Average (EMA) at $37.88.

A daily candle close below the 200-day EMA would pave the way for a deeper correction towards the $36.09 support level in the near term.

Currently, Hyperliquid’s momentum indicators suggest a bearish outlook. The Relative Strength Index (RSI) on the 4-hour chart reads 33, approaching the oversold region.

Meanwhile, Moving Average Convergence Divergence (MACD) indicators on the same chart showed a bearish crossover on Monday, projecting a negative outlook.

However, if the bulls regain control of the market, $HYPE could extend its recovery toward the 50-day EMA at $40.11.

A daily candle close above this level would allow the bulls to target the recent 4-hour swing high at $42.25.

However, the broader market conditions remain bearish, which could affect recovery for $HYPE and other leading cryptocurrencies in the near term.