Hyperliquid (HYPE) Rolls Out HyperEVM — Will It Reverse the Downtrend?

The Hyper Foundation has introduced HyperEVM, integrating smart contract functionality into its ecosystem through Layer 1 execution secured by HyperBFT consensus.

Despite the news, the price of HYPE continues to decline, losing 14% since yesterday, but there are signs it is starting to enter the oversold zone. Will we see a reversal soon?

Hyperliquid Introduces HyperEVM to Enhance DeFi Programmability

The Hyper Foundation, the team behind the decentralized finance (DeFi) protocol Hyperliquid, has launched HyperEVM, aiming to integrate general-purpose programmability into its financial ecosystem. This mainnet release incorporates HyperEVM blocks into Layer 1 execution, leveraging the security of HyperBFT consensus. 

It facilitates spot transfers between native and HyperEVM HYPE tokens, with HYPE serving as the native gas token. A system contract, WHYPE, has been deployed to support DeFi applications on the platform. While initial tooling and analytics may require refinement, the foundation is collaborating with developers to enhance these aspects. 

Future upgrades are set to enable ERC20 native transfers and precompiles, currently under community review in the testnet phase. Since its HYPE token airdrop in November 2024, Hyperliquid has seen significant growth, with the token’s value rising from $3.90 to approximately $26. In January, the platform reported $51.41 million in revenue and a total value locked (TVL) exceeding $677 million.

HYPE Price Analysis 

HYPE has followed a five-wave Elliott Wave structure, peaking near $35 on Dec. 22 before entering a corrective WXY pattern. The descending channel initiated after wave 5 completion leading to a low of $18.80 on Jan 13. The price action has since oscillated within a broadening wedge, indicating consolidation before a breakout.

Currently, the price is hovering near $24, having rejected $26.28 (0.236 Fibonacci retracement) and testing the ascending support trendline. The 0.382 Fibonacci level at $25.63 acted as temporary resistance, triggering a downward move. If the structure holds, further downside potential remains towards $22.73 (0.5 retracement) or even $19.83 (0.618 retracement) before a decisive reversal occurs.

The Relative Strength Index (RSI) on the 4-hour chart is close to entering the oversold territory, suggesting that sellers may be exhausted. This setup aligns with wave Y completion, potentially forming a bullish reversal structure.

If the support trendline holds, a potential breakout toward $29.22 (0.236 Fibonacci retracement of the larger move) could unfold, confirming a bullish continuation. A decisive close above $35 would invalidate the corrective structure and signal a renewed bullish impulse.

HYPE Price Prediction

The 1-hour chart provides a detailed Elliott Wave count, indicating a corrective a-b-c structure can be completed at nearly $20.38 which is projected as the same length as the previous downward move.

The price is currently breaking below short-term ascending support, hinting at a wave C decline targeting the 1.0 Fibonacci extension or $18.28 (1.272 extension).

A bounce from $22.03 (0.786 retracement) could serve as a local bottom, leading to an impulsive recovery. The primary bullish scenario assumes that wave C finds support at these Fibonacci extensions, propelling the price toward $26.28 (0.236 Fibonacci retracement) and $29.22 (0.236 of the macro move).

Should bearish momentum extend, $15.67 (1.618 extension) could be the final capitulation point before a reversal. A break above $26.28 would confirm the recovery, with targets set at $28.10 and $35 in an impulsive wave structure.

Key Levels to Watch

• Immediate Resistance: $25.63 (0.382 Fibonacci retracement)
• Major Resistance: $29.22 (0.236 Fibonacci retracement)
• Immediate Support: $22.03 (0.786 retracement)
• Critical Support: $20.38 (1.0 Fibonacci extension)
• Bearish Invalidation: Below $15.67 (1.618 Fibonacci extension)