Hyperliquid (HYPE) Dips Hard —  But Could This Emerging Pattern Trigger a Rebound?

Key Takeaways

• Hyperliquid (HYPE) has dropped over 19% on the week, with price stabilizing near a critical demand zone.
• The $19.22–$19.55 support area is emerging as a key level where sellers may lose control.
• A bearish Shark harmonic pattern is forming on the daily chart, hinting at a potential rebound if support holds.
• Strong token burns and notable whale buying are acting as a contrarian signal amid broader weakness.
• A reclaim of the 50-day moving average near $26.39 could confirm a bullish recovery phase.

Hyperliquid’s native token, HYPE, remains under sustained selling pressure as bearish momentum continues to dominate short-term price action. As of January 21, HYPE is trading nearly 9% lower on the day, extending its weekly decline to over 19%. The token is currently hovering around the $20.65 region, an area that is quickly becoming a decisive technical battleground.

While the chart reflects heavy downside pressure, a mix of aggressive supply reduction, strategic buying, and an emerging harmonic structure is raising the question: Is a rebound quietly setting up beneath the surface?

Burn and Buying Add a Contrarian Signal

Despite the ongoing price weakness, on-chain activity tells a more nuanced story.

As of January 21, Hyperliquid’s assistance fund burned 39 million HYPE tokens, permanently removing roughly 3.9% of the maximum supply from circulation. At the same time, notable buyers stepped in during the sell-off.

• Arthur Hayes reportedly purchased 19,000 HYPE
• The assistance fund itself continues to buy aggressively, paying prices over 50% higher than current market levels

This combination of sustained burning and dip-buying suggests growing long-term conviction, even as short-term sentiment remains fragile.

Could This Emerging Pattern Trigger a Rebound?

From a technical perspective, the daily chart shows HYPE entering the early stages of a bearish Shark harmonic pattern.

After completing the O-X-A leg, price rolled over and is now pressing toward the projected B-point support zone between $19.22 and $19.55. This area is highlighted on the chart as a historically reactive demand zone and could mark a potential exhaustion point for sellers.

If buyers step in around this support and price begins to stabilize, the next key technical hurdle would be a reclaim of the 50-day moving average near $26.39. A decisive move back above this level would strengthen the rebound thesis and open the door for a recovery move toward the C-point near $38.7, where the Shark pattern’s projected extension sits around the 1.13 level.

What’s Next for HYPE?

For now, the pattern remains in development, not confirmed. The coming sessions will be critical.

• Holding the $19.22–$19.55 zone would keep the harmonic setup alive
• Rising volume and stronger daily closes could signal buyer commitment
• A break back above the 50-day MA would act as early confirmation of a trend shift

On the downside, a failure to hold the lower support zone would invalidate the pattern and leave HYPE vulnerable to deeper consolidation.

For now, Hyperliquid sits at a technical inflection point, where intense selling pressure collides with supply destruction and early structural support. Whether this develops into a meaningful rebound or another leg lower will depend on how price reacts at the lower boundary in the days ahead.