Key Takeaways
HYPE dropped by 16%, with technicals suggesting that an extended pullback could offer more shorting opportunities.
Hyperliquid [HYPE] has been offering juicy swing trading opportunities within its $36-$50 price range in Q3. In fact, at the time of writing, short sellers were up 16% after a price rejection at the range-high of $50 in mid-August.
Still, the bears could pocket extra 16% gains if HYPE’s pullback extends to the range lows at $36. There may be nuances for bears and long-term spot buyers seeking a discounted window though.
Supertrend flashes firm ‘sell’
Source: HYPE/USDT, TradingView
On the 4-hour chart, the RSI and OBV reinforced weakness and market edge for bears. Additionally, the price dropped below the mid-range of $42 and any more daily candlestick closes below the level could further confirm short sellers’ edge.
If so, further retracement to $36 could offer another shorting opportunity. Especially if Fed chair Jerome Powell’s position during Friday’s Jackson Hole Symposium leans hawkish.
The 30-day liquidation heatmap also supported the aforementioned scenario.
On the lower side of the price action, pockets of liquidity and price magnets existed at $40 and $37.3. On the upside, the magnetic zones were at $45 and $50.
Source: CoinGlass
As such, a liquidity sweep for the lower magnetic zones could reinforce the shorting bias. However, a strong reclaim of the mid-range might invalidate the short thesis.
HYPE is undervalued?
That said, for long-term buyers, HYPE may be currently undervalued based on the SWPE (supply weighted profit to earnings ratio).
The indicator gauges HYPE’s market cap to its protocol earnings. However, the earnings also drive the HYPE buyback program. Hence, lower values could allude to strong demand and undervaluation.
Source: Skewga
At the time of writing, SWPE had a reading of 3.19 – A sign that HYPE’s value was still undervalued for long-term spot buyers.
To put it simply, HYPE appeared to be flashing mixed signals. From a fundamental point of view, it may be a great buying opportunity. However, on the price chart technical side, the altcoin’s sustained stay below the mid-range might offer extra shorting gains for short-term traders.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
