Hyperliquid price nears head-and-shoulders breakdown, risks drop below $40

Hyperliquid price has slipped toward a critical support zone as a developing head-and-shoulders pattern threatens to trigger a decline below $40.

According to data from crypto.news, Hyperliquid (HYPE) price has fallen more than 26% from its June 2 all-time high of $75.48 and briefly touched the mid-$55 range on June 10. The token’s decline coincided with a sharp reduction in derivatives exposure, with futures open interest falling to approximately $5.86 billion as long positions were liquidated across the market.

Additional pressure emerged after Hyperliquid’s June 6 vesting event unlocked roughly $700 million worth of HYPE tokens. The release added nearly 9.9 million tokens to circulation and arrived as early investors were already taking profits following the token’s rapid rally through May and early June.

Macro conditions have added another obstacle. Traders across digital assets have reduced risk exposure ahead of the latest U.S. Consumer Price Index report, while Bitcoin and Ethereum both remain below important technical levels. Capital from the crypto market has also gravitated toward large-cap technology equities and artificial intelligence-linked stocks, reducing liquidity available for speculative crypto assets.

Meanwhile, fresh on-chain activity has drawn attention to BitMEX co-founder Arthur Hayes. As crypto.news reported earlier, a wallet linked to Hayes was seen withdrawing 33,978 HYPE worth approximately $2.09 million from Bybit following the recent correction. Hayes later denied speculation that the transaction represented a fresh re-entry into HYPE.

The development came just four days after he disclosed liquidating his entire HYPE position, then valued at roughly $18 million, citing rising energy prices linked to the Iran conflict, upcoming artificial intelligence IPOs, and concerns that financial markets could peak before September.

Head-and-shoulders pattern projects a move toward the mid-$30s

Technical charts show HYPE approaching a critical neckline that has supported price action several times since late May.

On the four-hour timeframe, the token has formed a large head-and-shoulders structure with a head near $75 and shoulders around the $64 region. The neckline sits near $55, where buyers have repeatedly stepped in during the past week.

Hyperliquid price has formed a head-and-shoulders pattern on the 4-hour chart — June 10 | Source: crypto.news

A decisive breakdown below that level could activate the pattern’s measured target near $36, implying another 35% drop from current prices. The projected move closely matches the vertical distance between the head and neckline shown on the chart.

Momentum indicators continue to favor sellers. The four-hour RSI has dropped to around 36 and remains below its signal line, while the MACD has crossed into negative territory. Daily chart data shows a similar deterioration, with the MACD histogram extending deeper below zero and the RSI slipping below the neutral 50 mark.

Daily chart structure presents another concern. HYPE appears to have broken below the lower boundary of a bearish flag formation that developed after the sharp decline from its June 2 peak. The pattern formed as price consolidated within an upward-sloping channel following the initial selloff.

Bearish flags are typically continuation patterns that emerge after a strong downward impulse. The recent breakdown suggests sellers have regained control, increasing the risk of another leg lower if support levels continue to weaken.

Hyperliquid price has formed a bearish flag pattern on the daily chart — June 10 | Source: crypto.news

Such breakdowns often precede deeper retracements, particularly when accompanied by declining momentum and shrinking open interest.

Liquidation data identifies key support and resistance zones

CoinGlass liquidation heatmaps show the largest concentration of short liquidations clustered between $66 and $68. A recovery into that region could trigger forced buying from bearish traders and provide temporary relief for the market.

Hyperliquid liquidation heatmap | Source: CoinGlass

Support clusters appear considerably thinner beneath current prices. The next notable liquidity pockets sit around $54 and $53, leaving limited derivatives support if the neckline fails. Below that area, chart support does not emerge until the low-$40 region, which aligns with several analysts’ downside targets.

Commenting on the matter, analyst Altcoin Sherpa noted that continued weakness would not necessarily damage Hyperliquid’s long-term structure.

“Would like to see it continue chopping around this current area but if we lose $54, I think we fill the gap between $44-$54.”

Sherpa added that he remains focused on base formation rather than short-term price action and still considers HYPE one of the stronger altcoins over the long run.

If HYPE fails to hold above $54 would strengthen the bearish setup and increase the probability of a move toward the $44-$36 zone. A recovery above $64, where the right shoulder formed, would invalidate the head-and-shoulders pattern and force traders to reassess the current breakdown thesis.