Whales Short Hyperliquid (HYPE) Despite Record Volumes

Hyperliquid (HYPE) Price Faces Pressure as Whales Short the Market Despite Strong On-Chain Activity

Hyperliquid (HYPE) showed resilience in the crypto market today, rising from its daily open near $43 to briefly test $45 before retreating. Despite holding a market capitalization above $15 billion and limiting its daily drawdown to under 1%, the altcoin remains under significant pressure from whale short positions and institutional bets against its growth.

HYPE’s Struggle to Reclaim Momentum

After peaking near $51 in mid-July, Hyperliquid has struggled to maintain upward momentum. The cryptocurrency has since retraced, with persistent selling pressure weighing on its price structure.

This decline has been tied to large whale activity targeting Hyperliquid’s XPL token, where aggressive short positions and liquidation cascades raised concerns about the stability of the ecosystem. Traders and investors now face a dilemma: HYPE shows signs of strength in terms of network activity and adoption, yet market sentiment leans bearish due to heavy institutional shorting.

Whales and Institutions Bet Against Hyperliquid

One of the most notable developments is the entry of large-scale shorts against HYPE.

According to Onchain Lens, a whale recently shorted HYPE with a position worth around $3 million, executed between the $42.82 and $43 range. At press time, the whale was sitting on an unrealized loss of just over $28,000—suggesting that while their strategy has not yet paid off, confidence in downside potential remains.
On the institutional front, Abraxas Capital entered the fray with a massive $64.39 million short position on HYPE, using 5x leverage.

But the bearish bets did not stop there. Abraxas also shorted six other major cryptocurrencies, including:

Bitcoin (BTC)
Ethereum (ETH)
Solana (SOL)
Sui Network (SUI)
Injective (INJ)
World Liberty Finance (WLFI)

Notably, their BTC, ETH, SOL, and SUI positions carried 10x leverage, underscoring the hedge fund’s aggressive bearish outlook across the broader digital asset market.

This alignment between whales and institutional players adds weight to the current downside risks facing HYPE.

Price Action in a Technical Dilemma

From a technical analysis perspective, HYPE remains at a crossroads.

The altcoin recently broke below a key rising trendline, signaling weakness.
However, it is still trading above the SuperTrend indicator, which typically acts as a dynamic support in trending markets.

Since the $50 high on July 14, HYPE has been locked within a consolidation range between $36 and $50. Attempts to push past $50 have failed on three consecutive occasions, highlighting the importance of that resistance zone.

Interestingly, despite the lack of a decisive breakout, the token has been forming higher lows within this range, a potential signal that bulls are slowly regaining ground.

Hyperliquid Hits Record Revenue as HYPE Buybacks Surge: Is a Breakout Next?

At the time of writing, price action is oscillating around the range midpoint, leaving traders in uncertainty about the next decisive move.

Key Support and Resistance Levels

Critical support: $36 remains the “make-or-break” zone. A successful defense here could set the stage for a bullish reversal.
Resistance ceiling: $50 stands as the most important resistance level to watch. A breakout above this threshold could unlock a move back toward the $55–$60 range.
Invalidation zone: A breakdown below $36 would likely invalidate the current bullish structure, exposing HYPE to further downside.

Supporting this cautious outlook is the Chaikin Money Flow (CMF), which currently sits at -0.25, indicating sustained capital outflows from the asset.

On-Chain Metrics Reveal Hidden Strength

While short-term price action looks fragile, on-chain data suggests underlying strength in the Hyperliquid ecosystem.

Open Interest (OI):
- As per CoinGlass, HYPE’s open interest is at $1.84 billion.
- This marks an increase compared to the last two days, even though it has pulled back from the $2.06 billion peak recorded on Hyperliquid’s own exchange.
- Rising OI suggests that traders remain highly engaged with the token, which could amplify volatility in the near term.
Decentralized Exchange (DEX) Volume:
- Hyperliquid’s trading activity continues to thrive. The project recorded a record $398 billion in monthly DEX volume, underscoring strong adoption and liquidity.
- Over the last 24 hours alone, Hyperliquid saw $1.20 billion in trading volume, further highlighting its robustness despite bearish market pressure.

This divergence between weak price action and strong on-chain activity points to what analysts often call “hidden strength”—suggesting that the fundamentals may eventually support a bullish recovery once the current wave of shorts exhausts itself.

Broader Market Context

The bearish bets on HYPE do not exist in isolation. They reflect broader market sentiment, which has been leaning risk-off in recent weeks.

Bitcoin (BTC) remains range-bound, failing to decisively hold above critical resistance levels.
Ethereum (ETH) has also struggled with selling pressure, while altcoins like Solana (SOL) and Injective (INJ) show similar trends of consolidation with downside risks.

In this environment, hedge funds and whales are strategically shorting assets they believe are overextended, and HYPE has become one of the latest targets.

Outlook: What Traders Should Watch

Looking ahead, Hyperliquid traders need to keep an eye on several key factors:

Whale Behavior: Large whale shorts have been a driving force behind recent price action. Any signs of position closures or liquidations could spark a sharp reversal rally.
Institutional Exposure: The magnitude of positions taken by Abraxas Capital indicates that professional money managers are increasingly active in the HYPE market. Their next moves will likely influence sentiment.
Technical Levels: The $36 support and $50 resistance remain the most important zones to watch. Price action around these levels could determine whether HYPE breaks into a new trend.
On-Chain Adoption: Record-high DEX volumes and robust OI suggest Hyperliquid continues to gain traction. Sustained ecosystem growth could eventually translate into price support.
Macro Market Sentiment: Broader crypto market conditions, particularly Bitcoin’s trajectory, will likely dictate whether HYPE can escape its consolidation range.

Conclusion

Hyperliquid (HYPE) is at a critical inflection point.

On the one hand, whales and institutions are heavily shorting the token, applying downward pressure on price and amplifying risk in the short term.
On the other hand, on-chain fundamentals remain strong, with record trading volumes, robust open interest, and growing liquidity signaling underlying resilience.

In the short term, traders should prepare for continued volatility as the battle between bulls and bears plays out within the $36–$50 range. Longer-term, however, HYPE’s strong ecosystem metrics suggest it retains the potential for a bullish breakout once external selling pressure subsides.

For now, the market’s eyes are firmly fixed on whether HYPE can defend its critical support level and eventually mount another challenge toward the $50 resistance zone.