Hyperliquid (HYPE) is currently testing critical support levels around $22. This indicates weakness in the market. The Hyperliquid may experience further losses if the levels of support are not respected.

At the time of writing, HYPE is trading at $22.04, with a 24-hour trading volume of $414 million and a market capitalization of $6.58 billion. The HYPE has seen a 6.64% drop over the last 24 hours, signaling increased selling pressure.

HYPE Faces Critical Head-And-Shoulders Breakdown

Notable crypto analyst CryptoPulse has pointed out a head and shoulders formation on a daily chart. The neckline of this formation lies between $23.17 and $24.03, and a break below it may lead HYPE to drop to $18.

Investors need to keep a close eye on HYPE, as a breach of support could lead to a selloff in altcoins. CryptoPulse pointed out that today’s daily candle is very important.

If HYPE closes below the neckline, the technical analysis pattern suggests a possible short-term downward movement, measured from the head to the neckline. This technical analysis pattern has been a strong indicator for mid-cap altcoins in the past, as it has indicated trend reversals.

Also Read | Hyperliquid Faces Short-Term Pressure After Rejection Near $28.5 High

Hyperliquid Opportunity During Market Downturn

Meanwhile, another analyst, Altcoin Sherpa, explained that although there is weakness in the short term, the fundamentals of Hyperliquid are still solid. The project enjoys the advantage of having a strong community, product-market fit, positive cash flow, and an experienced dev team.

Traditionally, the HYPE token is considered to be one of the best opportunities to buy in the market whenever there is a downturn in the crypto market.

Additionally, Sherpa explained that recent team unlocks and significant sell orders in Bitcoin’s challenging market environment are also weighing on HYPE. Nevertheless, HYPE may look very attractive for long-term holders at a price range of $20 or even lower.

Also Read | Hyperliquid (HYPE) Rebound Brewing: $28.98 Break Triggers $39.87 Target

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