The hyperliquid price breaks past the bearish channel as smart money flows in and aims for a 30% rally

The hyperliquid price has broken out of a descending parallel channel pattern, supported by demand from smart money investors.

According to data from crypto.news, Hyperliquid (HYPE) rose for the fifth day in a row, rising 17.5% from the January 2 low to an intraday high of $28.2 earlier today, January 7. While trading at $27.5 at the time of writing, the gain extends to 26% as measured from the low of $22.3 in December.

The hyperliquid price rally was supported by an accumulation trend from smart money investors.

According to facts van Nansen, ‘Smart Money’ participants double their bet on Hyperliquid. For example, Maven 11 recently added 161.3K HYPE tokens, bringing the value of their total holdings to $4.5 million, while a16z crypto and Borderless Capital added another 42.3K tokens to their respective holdings.

Such smart money accumulation trend could have encouraged retail investors to continue with additional purchases, further fueling the upward momentum.

Another potential catalyst behind the rally is Hyperliquid’s aggressive buyback strategy. The protocol buys back tokens from the market using the revenue generated by the protocol and burns tokens from circulation. In late December, the protocol burned through nearly $912 million worth of HYPE tokens.

When such burning events reduce circulation, it increases scarcity, which in turn tends to create additional demand for the related token.

The hyperliquid price has broken out of the multi-month descending parallel channel pattern on the daily chart. If such a pattern is confirmed, it indicates that buyers have strong control over the market and may continue to push prices higher.

Looking at technical indicators, they seem to show a bullish bias for the token, at least in the short term.

The Moving Average Convergence Divergence indicator showed a bullish crossover with growing green histograms, while the Chaikin Money Flow index showed a positive value of 0.22. Together they confirm that momentum and capital inflows support the uptrend.

Therefore, HYPE could most likely recover to the December 4 high at $35.8, which is also in line with the target calculated by adding the channel high above the level at which the breakout occurred. At the time of writing, the target was almost 30% above current price levels.