Hyperliquid price (HYPE) faces the risk of breaking below the support level of $40 after retreating from its historical peak.

The surge of Hyperliquid (HYPE) is showing signs of stagnation, after this high-performance Layer-1 blockchain token reached a new historical peak at $45.72 on Monday. However, as of the update on Tuesday, HYPE has retreated to the $40.13 mark, corresponding to a drop of more than 3.5%.

Hyperliquid temporarily suspends price exploration phase

Hyperliquid has extended its price rally during Monday's trading session, driven by optimistic sentiment after Bitcoin (BTC) unexpectedly broke the resistance level of $107,000 in a short recovery. However, the wave of profit-taking after the new record high, combined with escalating geopolitical tensions between Israel and Iran, is causing market sentiment to reverse, pushing the entire cryptocurrency space into a cautious and volatile state.

In the latest update, QCP Capital noted that the cryptocurrency market's continued stability "amid increasing geopolitical risks" is noteworthy. However, the adjustment momentum of Hyperliquid may persist if it cannot maintain the important technical support level at $40.00 — especially in the context of the derivatives market witnessing a significant decline in the open interest index (OI).

According to data from CoinGlass, OI — representing the total number of futures and options contracts that are open but not settled — has fallen by nearly 8%, now standing at 1.91 billion USD over the past 24 hours, indicating that speculative funds are gradually withdrawing from the market.

! HYPE Derivatives Statistics | Source: CoinGlasTrading volume over the same period has soared by more than 54%, reaching $2.89 billion — a clear signal that liquidation activity is on the rise. In just the last 24 hours, the market saw $1.77 million liquidated, of which (Long) long positions dominated with $1.23 million, while short (Short) positions were only at around $542,000.

This development, combined with the continued fall of the open contract (OI), reflects a significant decrease in interest in HYPE. It also shows that traders' confidence during the price discovery phase is gradually shaking. Currently, the entire market is looking towards the key support level of $40 – a price point that could serve as a springboard for a new bullish cycle or could be breached, opening a new chapter in market developments.

Technical Outlook: Bears Intensify Pressure

Hyperliquid (HYPE) is trading around $40.13 at the time of writing, marking a fall of more than 12% from the all-time high of $45.72 set on Monday.

The upward momentum shows clear signs of weakening as the market trend shifts to a downward direction, reinforced by sell signals from the MACD indicator (Moving Average Convergence Divergence) on the daily chart. Specifically, if the green MACD line ( crosses below the red signal line ), that will be a confirmation signal that the downward trend is prevailing — often prompting investors to reduce their positions in HYPE.

Daily HYPE/USDT chart | Source: TradingViewThe profit-taking sentiment following the breakout to a new high has increased selling pressure, pushing the price at risk of breaking through the important support level at $40.00.

In addition, the RSI (Relative Strength Index) has moved out of the overbought zone and is heading towards the 50 average mark, reflecting the clear dominance of the sellers. In the event that the price continues to adjust, notable support areas below the $40 threshold include: the $36.00 range, the 50-day exponential moving average (EMA) at $32.01, and the 100-day EMA at $27.4 — all marked in green on the technical chart.

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