Hyperliquid Rises 20%...What's the Secret to Overwhelmingly Outperforming Bitcoin and Ethereum?

▲ Hyperliquid (HYPE)/AI-generated image

Hyperliquid (HYPE) is attracting market attention with a surge that overwhelmingly outperforms Bitcoin (BTC) and Ethereum (ETH). Rising 20% in a single day, Hyperliquid significantly surpassed Bitcoin's 0.9% and Ethereum's 0.5% gains over the same period, and $25 million flowed into spot HYPE ETFs on May 20.

CoinGape reported on May 21 (local time) that institutional buying, a surge in open interest, and strong buying pressure were the technical reasons Hyperliquid outperformed Bitcoin and Ethereum. According to the article, the HYPE ETF showed a contrasting trend on the same day, with Bitcoin experiencing a $70 million outflow and Ethereum a $28 million outflow.

Goldman Sachs sold 70% of its Ethereum ETF holdings while purchasing 654,630 shares of Hyperliquid Strategies stock worth $3.3 million. Hyperliquid Strategies' stock price hit an all-time high of $8.71 on May 20, and Grayscale reportedly also bought $10 million worth of Hyperliquid tokens.

Signs of overheating are also evident in the derivatives market. According to CoinGlass data, Hyperliquid's open interest reached an all-time high of $2.74 billion. Open interest, which stood at $1.54 billion on May 14, increased by over $1 billion in just one week. Binance's long/short ratio was recorded at 0.90, and $24 million in short positions were liquidated on May 20. An additional $12 million worth of positions were cleared as of the article's writing on May 21.

Technical indicators also pointed to a dominance of buying pressure. Hyperliquid has risen 50% since May 14, and its Relative Strength Index (RSI) climbed to 78. Although it entered the overbought zone, CoinGape noted past instances where fatigue only appeared after the RSI reached 85. The Moving Average Convergence Divergence (MACD) also supports the bullish trend, suggesting it could rise to $77 if it closes above $59.39.

Hyperliquid's surge is presented as a result of a combination of institutional fund inflows, a sharp increase in open interest, and the liquidation of short positions, rather than a simple short-term rebound. Market attention is focused on whether it will break through its all-time high of $59.39, with analysis suggesting that surpassing this level could open the door for further gains towards $77.

*Disclaimer: This article is for investment reference only, and we are not responsible for any investment losses based on it. The content should be interpreted for informational purposes only.*