Here’s why the price may drop 22%

Correction at $30 or a pump at $50: what’s next for HYPE?

Hyperliquid (HYPE) has seen an evident recovery throughout April, with its price rising 7% since the beginning of the month.

However, one popular analyst warned that the rally could soon reverse into a double-digit pullback.

Prepare for a crisis?

In recent days, HYPE has consolidated around $40, while its market cap sits just below $10 billion. This makes it the 13th largest cryptocurrency, but according to Ali Martínez, things may get worse in the short term. He argument that HYPE has broken out of a rising wedge: a pattern that signals a correction towards $31, or a 22% drop from current levels.

Another analyst who recently weighed in on the asset’s performance is X user Ted. Several days ago, he fictional that “large groups are forming on the downside,” adding that this could lead to a short-lived rise to $42-$46, but after that, “the biggest problem is dumping, not pumping.”

It’s important to note that earlier this week, Hyperliquid’s native token briefly rose into that range before heading south, so it remains to be seen if the rest of Ted’s outlook proves accurate.

The HYPE Relative Strength Index (RSI) reinforces the bearish scenario. The technical analysis tool ranges from 0 to 100, where anything above 70 indicates that the price has risen too far, too quickly, and could be a precursor to a correction. On the contrary, readings below 30 are interpreted as buying opportunities. At the time of writing, the RSI is around 75.

How about a new rebound?

Meanwhile, some analysts believe HYPE is poised for much more significant gains soon. The trader, using the nickname X Crypto King, said to his nearly 900,000 followers that the price could surpass $50 sometime next month.

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“HYPE is respecting all levels in this upward move. The chart shows a clear step structure with three successful retests of support. Each bounce leads to strong upward momentum. We are now on the third retest, looking for a move towards $50,” their analysis reads.

The recent net exchange flow of the currency is a clear bullish factor. Data shows that outflows have exceeded inflows in recent days, indicating that investors have abandoned centralized platforms and switched to self-custody methods. This, in turn, reduces immediate selling pressure.