Hyperliquid (HYPE) is approaching a crucial technical level on Sunday, February 22. Market participants are waiting to see whether HYPE can rise above the resistance level at $31.73 or drop below the support level at $28.76.
This comes as short-term technical indicators continue to decline and volume dries up as a result of a potential volatility explosion.
As of writing, HYPE is changing hands at $29.71. This represents a decline of 1.45% over the last 24 hours and a 5.64% decrease over the last seven days. According to CoinMarketCap data, the token’s volume has dropped by 55.78% to $87.44 million.
Source: CoinMarketCap
HYPE Tests Key SMA as RSI Signals Breakout
Umair Crypto, a crypto analyst, highlighted that a successful test and rise above the 50-period Simple Moving Average at $31.73 could lead the token to the next resistance level at $35.47. The 50-period Simple Moving Average has rejected price action six times, reinforcing it as a strong resistance level.
The chart shows that the Relative Strength Index (RSI) continues to hold its upward trendline. It’s also approaching the 50 level. A rise above 50 could signal a potential breakout above the 50-period Simple Moving Average.
The $28.76 marks the neckline of the inverse head and shoulders pattern. According to the analyst, if the price drops below the neckline, the bullish pattern will be negated, and the price may move toward the $23 region.
Source: X
Also Read: Hyperliquid Approaches Trendline Resistance With 25% Breakout Potential
The pattern has been described as a binary one. If the price breaks above the resistance level, it may lead to an expansion phase. The price may move in the opposite direction if it drops below the support level.
Liquidity Structure Sets Path Toward $38
In addition, another analyst, Altcoinpedia, mentioned that Hyperliquid has gained popularity in the decentralized finance (DeFi) space due to its high-speed execution model and the liquidity structure. Recently, the price of the token rose above the $31 level before moving back toward the $30 region.
Analysts further mentioned that the price may move toward the $38 region, as the liquidity structure may lead to an expansion phase. However, the price targets may depend on the confirmation of the targets based on the buying pressure and the price moving above the resistance level.
Source: X
In the current situation, the price of the asset may move toward a triangle formation. The price could move either way if it breaks above the triangle.
The 20-day moving average has been serving as dynamic price support in the current scenario. If the price reacts around the 20-day moving average, the bulls may be in control of it in the short term.
Also Read: Dogecoin Pullback Accelerates as Resistance Holds Near $0.116 Level
