• Hyperliquid extends recovery as optimism for a bullish fourth quarter returns.
• HYPE’s DeFi TVL increases 4% over the past 24 hours to $2.15 billion as investor confidence improves.
• Retail demand for HYPE shows signs of a strong comeback, with the Open Interest-weighted funding rate rising to 0.0085%.

Hyperliquid (HYPE) is on the verge of a bullish breakout, rising above $42.00 at the time of writing on Monday. The perpetual Decentralised Exchange (DEX) native token mirrors a bullish wave spreading across the cryptocurrency market after the United States (US) Senate passed a bill to end the ongoing record-breaking government shutdown.

Hyperliquid DeFi TVL recovers backing risk-on sentiment 

Hyperliquid’s Decentralized Finance (DeFi) Total Value Locked (TVL) is up by nearly 4% over the last 24 hours to $2.15 billion, according to DefiLlama. 

Investors often increase their exposure to staking protocols within the ecosystem when they have confidence in the token’s ability to sustain short-term recovery. Higher staking volumes reduce the potential selling pressure in the open market, creating a suitable environment for a sustainable uptrend.

Traders are increasingly piling into Hyperliquid long positions, as evidenced by the Open Interest-Weighted Funding Rate metric’s lift to 0.0085% on Monday from 0.0060% the previous day. If risk-on sentiment steadies in the coming days, encouraging investors to increase their exposure, HYPE may sustain recovery, targeting highs above $50.00 in the short to medium term.

Technical outlook: Assessing Hyperliquid’s bullish outlook

Technical analysis shows that bulls are slowly regaining control as Hyperliquid’s price rises alongside other cryptocurrencies. The token is trading marginally below the confluence of the 50-day and 100-day Exponential Moving Averages (EMAs) at around $42.64 at the time of writing on Monday.

The Relative Strength Index (RSI) is at 50, poised to confirm a bullish crossover on the same daily chart, increasing the odds of a steady short-term uptrend. Higher RSI readings would support HYPE’s bullish outlook.

Traders should also watch for a potential buy signal from the Moving Average Convergence Divergence (MACD) indicator. Such a signal occurs when the blue line crosses above the red signal line, encouraging investors to increase their risk exposure.

The SuperTrend indicator has flipped below Hyperliquid’s price, marking a potential shift from bearish to bullish. Still, a correction may occur if HYPE fails to breach the confluence resistance at $42.64. The 200-day EMA at $37.22 will serve as the next primary support if a sell-off ensues below the critical $40.00 level.