An unidentified address on Hyperliquid has initiated a $12.7 million HYPE long position with 5x leverage as of May 15, 2026, marking a high-stakes bet despite the token’s recent downward volatility. The move comes as HYPE retreated to around the $40 figure, a 10.7% week-over-week decline from previous levels. While the massive position demonstrates conviction from some market participants, on-chain data shows the trade was down by $140,000 shortly after its opening.
The $40 mark has transitioned from a stable floor to a site of intense market contention. For the first time since April 10, HYPE has closed a daily candle below this psychological horizontal level and lost support from its ascending trendline. This shift in structure suggests a cooling of the momentum that previously drove the asset upward. If the price fails to reclaim and hold $40, technical analysts suggest a potential slide of another 8.50%, which would target the next established support at $35.
General market caution is also rising as macro warning signs emerge across the digital asset space. While certain speculators are doubling down, the broader technical setup for HYPE reflects a dominant bearish trend. The Stochastic Momentum Index (SMI) has dropped deeper into the negative zone, indicating that the strength of the current downtrend remains intact despite intermittent attempts at a rebound.
Whale wallets take opposite sides as volatility increases
Activity on the Hyperliquid platform reveals a sharp divide between large-cap investors. On May 14, two specific addresses showed concentrated interest in accumulating the token. Wallet 0x4c64 transferred $7.26 million USDC to the platform, setting limit orders between $30.88 and $35.88. Simultaneously, wallet 0x7fA7 deposited $2.43 million USDC to perform an immediate purchase of 62,230 HYPE tokens, showing a preference for current market prices over deep discount orders.
However, the “short” side of the market is currently seeing significant success. One whale using wallet address 0x3def9f5 opened short positions totaling $72.32 million across various markets, with $47.78 million of that specifically targeting Hyperliquid. As of May 14, this individual was sitting on an unrealized profit of more than $43.61 million. Another whale, identified only as “Loracle,” reportedly earned $1.2 million in a single day as HYPE’s price hit the $40 threshold.
The bearish sentiment is further evidenced by a whale using the name “Cooker.hl,” who sold 45,786 HYPE tokens for $1.8 million in USDC earlier in the month. These funds were deposited into Coinbase, following an average sale price of $39.39. This kind of market resistance from major holders often creates a ceiling for price recovery, as large liquidations must be absorbed by new buyers before a trend reversal can be sustained.
Downtrend strength confirmed by technical indicators
Technical data from TradingView paints a difficult picture for those hoping for a rapid recovery. The Aroon Down line is currently positioned above the Aroon Up line at 92%, a reading that suggests a strong downtrend. This indicate that new lows are being hit more frequently than new highs, giving sellers significant control over the immediate price action. Such imbalance often precedes further consolidation or a secondary leg down.
Trading volume in the derivatives sector is also cooling off, which can lead to increased volatility. Perpetual volume on Hyperliquid dropped from $7.6 billion to $6.3 billion recently, indicating a decline in overall speculative interest. This reduction in liquidity sometimes exacerbates price swings when large orders are executed. As market sentiment reacts to institutional flows, the HYPE market remains sensitive to the movements of its largest participants.
Despite these headwinds, there have been signs of local resilience. After the uptrend initially collapsed at $42, price action dropped to a low of $38.8 before defending those levels and rebounding toward $40.7. This 4.12% daily gain showed that buyers are still active near the $40 region. However, the path to a broader recovery requires the token to definitively flip $40 back into support. Until that happens, the bears maintain the upper hand in the current market environment.