Hyperliquid (HYPE) Exhibits a Strong Bullish Reversal After Extended Correction

HYPE has recently exhibited a strong bullish reversal following an extended corrective decline. The 4-hour chart highlights a broader Elliott Wave structure

Hyperliquid (HYPE) has shown a strong bullish reversal in recent times, following an extended corrective decline. The 4-hour chart highlights a broader Elliott Wave structure, which suggests a potential shift in trend.

For the past few months, HYPE had been showcasing a corrective price pattern, which is evident in the 4-hour chart. This follows a steep decline from the highs of $35.17, which commenced in early 2023.

The cryptocurrency found substantial support around the $11.81 mark, forming a potential reversal zone. This is where the descending wedge pattern, which had been forming since May 2023, reached its apex.

The breakout from the wedge pattern, along with the support at $11.81, signaled renewed bullish momentum, aligning with the Elliott Wave structure. This structure indicates the possible initiation of a five-wave impulsive recovery.

As HYPE continues its upward journey, key Fibonacci retracement levels will be crucial in determining support, resistance, and potential upside targets.

The 0.786 Fibonacci retracement level of the 2023 decline, located at $15.36, is currently being tested by the price. This level serves as an initial barrier for further gains.

A decisive breach above this level could clear the way for the next resistance at the 0.618 Fibonacci retracement level, situated near $20.

A more substantial resistance point lies at the 0.5 Fibonacci retracement level, which is anticipated around the $22 handle.

Momentum indicators, such as the Relative Strength Index (RSI), suggest increasing strength in the market. The RSI has rebounded from oversold territory and is now approaching neutral levels, confirming bullish intent.

However, for the uptrend to continue, the price needs to sustain above the $15.00 pivot. A failure to hold this level may trigger a retest of lower supports, with $12.89 acting as a key pivot.

HYPE 1-Hour Chart: Still Room For Higher

The 1-hour chart of HYPE presents an ongoing five-wave impulsive structure in the broader recovery from the lows of early 2023.

Currently, Wave (iii) is unfolding, which has seen the price break through a minor descending trendline and approach Fibonacci extension levels.

The next immediate resistance is anticipated at the 1.0 extension level, which is located near $15.61. However, if this is the assumed wave (iii), more upside will be expected.

A temporary pullback in Wave (iv) is possible before the final Wave (v) extends higher. Should this occur, a correction towards the 0.618 retracement of Wave (iii), around $14.57, is a reasonable expectation.

If buyers manage to defend this level, then Wave (v) could push the price towards the 1.618 Fibonacci extension at $17.29, aligning with previous structural highs.

A broader bullish target for the impulse lies at the 2.0 Fibonacci extension at $18.33. This level would represent a significant recovery point in the larger downtrend.

However, if bullish momentum fades and the price drops below $12.89, it could indicate a failed breakout, leading to a deeper retracement towards the prior support near $11.81.