Hyperliquid Price Alert: Is Plummeting OI Signaling Another 20% Crash?

Open interest is bleeding out. Traders are cutting their exposure, and the charts are whispering warnings. The question isn't if, but when the next leg down begins.

The Signal in the Slump

Forget the hype. The real story isn't on the price chart—it's in the derivatives data. A sustained drop in open interest (OI) isn't just profit-taking; it's capital flight. It means big players are quietly exiting their leveraged bets, leaving the market thinner and more vulnerable than it looks. This isn't a pause; it's a retreat.

When Liquidity Vanishes

Thin markets break easily. With fewer contracts propping up the order books, any significant sell order can trigger a cascade. The 20% dip scenario isn't a wild prediction—it's simple market mechanics. Reduced OI means less buying power to absorb shocks, turning minor corrections into full-blown slides. It's the financial equivalent of removing the safety net.

The Bull Trap Special

Watch for the classic setup: a dead-cat bounce on low volume, hailed by permabulls as a 'reversal.' Then, reality hits. The lack of sustained OI growth reveals the move as pure speculation, not conviction. The subsequent drop catches everyone who 'bought the dip'—again. It's a rinse-and-repeat cycle older than the 'store of value' narrative.

Timing the Fall

Markets don't crash when everyone expects it. They crack when complacency sets in. The current OI decline suggests smart money is already positioning for volatility. The fuse is lit; it's just a matter of what spark hits first—a macro tremor, a sector-wide deleveraging, or just good old-fashioned panic.

So, is Hyperliquid set for a 20% haircut? The derivatives tape screams yes. But in crypto, the only certainty is that the crowd is usually wrong—right up until the moment they're devastatingly right. Just ask anyone who's ever held a bag for the 'long-term vision' while watching their portfolio do its best impression of a skydiver without a parachute.

The Hyperliquid Price is facing intensified downward pressure as the Federal Reserve’s didn’t made dovish commenatry infact it was hawkish rate cut that sparked broader uncertainty across crypto markets. Despite strong fundamentals highlighted by market observers, Hyperliquid price today continues to decline, reflecting a shift in sentiment that now overshadows its earlier strength and fuels concerns of further downside.

Hawkish Fed Cut Accelerates Decline

The latest move in the Hyperliquid price chart aligns closely with the Federal Reserve’s decision to deliver a hawkish 25 bps rate cut, a policy stance that surprised many market participants. 

Instead of triggering risk-on interest, the Fed’s tone signaled caution, effectively removing near-term expectations for additional cuts. As a result, several risk assets, including Hyperliquid crypto, experienced renewed selling pressure.

Consequently, the Hyperliquid price USD value slipped to nearly $27, marking a 9% intraday drop and extending its seven-day decline to roughly 25%. The fall also came after a clear rejection from the 20-day EMA, reinforcing the downward trend forming on shorter-term timeframes.

Traders Position for Deeper Downside

Ahead of the Fed meeting, one trader publicly shared a short-side setup that anticipated pressure on the Hyperliquid price. His view was based on historical reactions to similar macro events, and the trade played out as expected. 

Following the drop, his latest commentary highlighted the absence of meaningful support within the last three months of price action.

Based on that historical data, he now expects the Hyperliquid price today to gravitate toward $21, implying an additional 20% downside from current market levels. This level is now being watched as a potential near-term destination if selling pressure persists.

Strong Fundamentals But Rising Market Fear

Meanwhile, commentary shared through an image on X emphasized that HYPE’s fundamentals remain stronger than ever, yet broader market fear continues to overshadow them. According to that assessment, Hyperliquid’s Core metrics still point toward undervaluation, but market participants appear unwilling to price in strength while macro uncertainty dominates.

Fundamentals for $HYPE are stronger than ever but everyone is fearful to buy and waiting for @HypeStrat to bid.

Data: https://t.co/YEMlw3RzG7 pic.twitter.com/5A6qZ2LYN1

This disconnect between fundamentals and market behavior is not uncommon during risk-off phases. Although long-term indicators remain supportive, short-term fear can still suppress any immediate recovery attempts.

Open Interest Declines as Retail Demand Weakens

Further adding to the cautious backdrop, derivatives data from Coinalyze shows that Hyperliquid Open Interest has fallen to $1.3 billion, representing a 3.5% decline. 

This drop reflects cooling enthusiasm among retail traders and suggests that interest in high-beta assets like Hyperliquid crypto may continue to soften until market confidence returns.