Here’s why HYPE price may drop 15% before surging to $50

Hyperliquid’s token dropped sharply this week as its recent rally lost momentum and investors booked profits. Hyperliquid ( HYPE ) price dropped to $33.4, down by 15% from its highest point this month. HYPE entered a correction for two main reasons. First, the pullback followed a sharp rally of over 330% from its April low, which had made it one of the top-performing tokens in the crypto market. It is common for a surging asset to retrace as investors take profits. The decline also reflects the concept of mean reversion, in which price returns toward its long-term moving averages after extreme moves in either direction. Second, HYPE price dropped as the recent crypto market rally faded. Bitcoin ( BTC ) fell to $107,400, one week after hitting a record high near $112,000. Meanwhile, the total crypto market cap dropped to $3.39 trillion. You might also like: No VC, $1B Trades, and a 300% Rally — what makes Hyperliquid crypto tick? Falling crypto prices affect HYPE because it may affect the volume on its platform. This trend has yet to reflect on Hyperliquid, where the daily volume rose by 62% to $11.25 billion. Still, there are signs that the HYPE price will bounce back because of its market share in the perpetual futures market. It has handled transactions worth over $37 billion in the last seven days, much higher than Jupiter, Vertex Edge, and MYX Finance combined. HYPE price technical analysis HYPE price chart | Source: crypto.news The daily chart shows that the HYPE price bottomed at $9.3370 in April and then rebounded to a record high of $39.88 this month. It formed a cup-and-handle pattern whose upper side was at $28.31. Since this cup had a depth of approximately 66%, measuring the same distance from the top of the cup projects a target of $47. The most likely scenario is that HYPE drops 15%, retests the $28.31 breakout zone, and then resumes its uptrend toward the $47 target. This pattern is known as a break-and-retest, where an asset breaks resistance, retests it as support, and continues in the direction of the original breakout. You might also like: Hyperliquid responds to CFTC’s request for comment on perpetuals and 24/7 trading

Source: crypto.news