Hyperliquid Loses Public Interest, So Why Is the Derivatives Market in a Buying Frenzy?

▲ Hyperliquid (HYPE), Dollar (USD)/ChatGPT generated image ©

Hyperliquid (HYPE), which garnered explosive attention amid Middle East tensions by supporting crude oil futures trading, is now attracting market focus as it firmly holds the $40 mark and prepares for a new uptrend, despite a recent decline in public interest.

According to investment media outlet FXStreet on April 27 (local time), Hyperliquid was trading around $42 on Monday, maintaining a rebound within a rising wedge pattern. With recent efforts for a peace agreement between the U.S. and Iran easing geopolitical tensions in the Middle East, individual investors' interest in this decentralized exchange, which offers 365-day crude oil futures trading, has waned. According to blockchain data analytics platform Santiment, Hyperliquid's social dominance plummeted from 0.688% on March 30, when the conflict was at its peak, to its current 0.137%.

However, in contrast to the cooling public interest, short-term positions targeting a bull market are rapidly being established in the derivatives market. According to Coinglass data, Hyperliquid's open interest increased by approximately 3% over the past 24 hours, reaching $1.66 billion, indicating a significant rise in the notional value of outstanding contracts. Furthermore, funding rates have remained mostly positive over the past month, currently at 0.0077%, proving that the buying sentiment among leveraged traders remains robust.

From a technical analysis perspective, Hyperliquid is forming a rising wedge pattern between two converging trend lines on the daily chart, indicating a positive trajectory. The current price is above both the 50-day exponential moving average (EMA) of $38.98 and the 200-day EMA of $34.90, establishing a strong floor.

Auxiliary indicators also suggest a favorable environment for buyers. The Relative Strength Index (RSI) on the daily chart is at 57, showing stable bullish momentum without reaching overbought conditions. Concurrently, the Moving Average Convergence Divergence (MACD) is gradually rising towards the signal line, indicating that the downward momentum that had been weighing on the market is gradually losing strength.

The initial hurdle for a short-term uptrend is the resistance level at $43.71; a breakthrough here could extend the rally to the upper trend line near $46.80. While the current price is above the rising trend support line around $41.21, maintaining an overall bullish sentiment, there is also a risk of a deep correction to the 50-day EMA at $38.98 and then to the 200-day EMA at $34.90 if this support line breaks.

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