• Hyperliquid extends gains on Wednesday after a 6% jump the previous day, linked to the US-Iran ceasefire.
• HYPE futures Open Interest jumps 9% in 24 hours, signaling renewed risk appetite.
• The technical outlook is bullish as HYPE breaks above a falling channel pattern, targeting $41.

Hyperliquid (HYPE) approaches $40 at press time on Wednesday, extending the US-Iran ceasefire-linked recovery. Retail demand for HYPE is rising, leading to elevated futures Open Interest amid improved broader market sentiment. Technically, HYPE breaks out of a falling channel pattern on the 4-hour chart, suggesting a near-term bullish outlook.

Broader market risk-on sentiment fuels demand for the everything exchange token

Hyperliquid stayed resilient throughout the US-Iran war as its platform provides a 24/7 trading window for crude oil and other commodities that gained traction during the war. The ceasefire-linked recovery in the crypto market is heightening anticipation for HYPE’s recovery.

CoinGlass data shows the HYPE futures Open Interest (OI) stands at $1.67 billion on Wednesday, up over 9% in the last 24 hours. Typically, an OI expansion during a spot market recovery signals latent demand entering the leverage market.

Liquidations over the last 24 hours totaled $4.49 million, led by $4.28 million in shorts, reflecting a sell-side weakness. Additionally, the OI-weighted funding rate remains positive at 0.0082%, reflecting the consistent bullish tilt in the traders' sentiment. 

Technical outlook: Will HYPE cross above $40?

Hyperliquid recovery crosses above the 50- and 200-period Exponential Moving Averages (EMAs) on the 4-hour chart, reflecting a potential trend reversal. At the time of writing, HYPE trades around $39.00, extending the breakout gains of a falling channel pattern (see chart below).

HYPE tests the 50% retracement level of the $43.72 to $34.45 slide at $38.81. A decisive close above this level would put the 78.6% Fibonacci retracement level at $41.55 in the range, followed by the March 18 high at $43.72.

The Moving Average Convergence Divergence (MACD) line is above its signal and the zero line, with a positive histogram suggesting strengthening upside momentum. The Relative Strength Index (RSI) at 68 remains below overbought territory, suggesting firm buying pressure without clear exhaustion at this stage.

Looking down, a reversal in HYPE could test the 200-period EMA at $37.10, close to the broken descending trendline zone. A drop below this zone would nullify the channel breakout and deepen the downside risk.

(The technical analysis of this story was written with the help of an AI tool.)