Hyperliquid, Said to be Overvalued, Surges to $60?...A Short Squeeze Bomb Ahead of All-Time High

▲ Hyperliquid (HYPE)/AI-generated image

Hyperliquid (HYPE), which has emerged as one of the most powerful momentum assets in the virtual asset market, has made an explosive breakthrough and is on the verge of reclaiming its all-time high.

U.Today, a virtual asset specialized media outlet, reported on May 22 (local time) that Hyperliquid's price soared to around $60, entering a strong upward expansion phase. This surge is the result of consistent accumulation and trend formation over several months, showing a very strong structure from a technical perspective. Currently, Hyperliquid's price is well above its 50-day, 100-day, and 200-day moving averages, maintaining a clear upward trend since March. In particular, the recent breakout candle completely neutralized the resistance zone that had formed between $48 and $50, leading to a massive influx of aggressive trend-following buying.

This rally is not merely a surge in a low-liquidity state; rather, it is interpreted as a breakout driven by genuine buying pressure, as the price increase was accompanied by an explosion in trading volume. Currently, with the Relative Strength Index (RSI) exceeding 75 and entering an overheated zone, strong momentum is being maintained, while it has entered a high-risk, high-reward phase where increased volatility and the risk of sudden sharp declines coexist.

What is noteworthy is how successfully Hyperliquid overcame the downtrend when it was pushed below the trendline support in early May. At that time, selling pressure attempted to break the upward structure, but buying pressure quickly absorbed the downward pressure, pulling the price back above the main moving averages. When such attempts at a downward breakout fail, investors trapped in short (bearish) positions are forced to buy back (short squeeze) to avoid liquidation, which then acts as a powerful fuel for further upward rallies.

Furthermore, Hyperliquid is benefiting from a macro capital rotation trend. This is because capital in the virtual asset market is currently shifting back to high-beta speculative assets linked to derivatives infrastructure and perpetual futures trading ecosystems. Hyperliquid is at the center of this trend, explaining why traders persistently cling to trend-following buying despite criticisms that the asset's value is already significantly overvalued. The next key test will be the psychological resistance level of $60 and the all-time high zone beyond that.

If Hyperliquid can consolidate and trade sideways above the $55 mark without a decrease in trading volume, there's a high probability it will move directly into a full-fledged price discovery (new all-time high rally) phase. However, as a vertical rally cannot last forever without a correction, if the momentum breaks, the first key support level is expected to be the previous breakout zone of $48 to $50.

*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.*