Hyperliquid’s token, HYPE, resumed its sharp decline after a short pause on July 6, dropping back to a key support zone closely monitored by traders. Despite the price drop, on-chain data revealed that long-term investors have been increasing their stakes instead of selling off their holdings.

One major player recently staked approximately 1.49 million HYPE tokens, valued at about $88.2 million. This large stake was distributed across eight different wallets, a move that diversifies risk and lowers concentration in a single address. These wallets reportedly held the tokens for around nine months before staking, signaling a long-term strategy rather than short-term speculation.

Staking activity for Hyperliquid has seen a significant jump. According to recent network data analyzed by AMBCrypto, Net Staking Flows increased by 40%, pushing the total staked HYPE supply to roughly 436 million tokens. This surge in staking directly reduces the liquid tokens available for trading, which could have a tangible impact on price dynamics.

However, staking growth does not automatically lead to price hikes. It often indicates holders prefer earning staking rewards over liquidating assets during downturns. In HYPE’s case, this behavior coincided with the token’s return to a Demand Zone that historically attracted buying interest. The key question remains whether this reduced circulating supply can cushion the ongoing correction.

HYPE’s Price Levels and Market Structure

Despite the recent pullback, HYPE’s overall market structure on the daily chart remains bullish. The token settled back into the $52 to $58 Demand Zone, an area responsible for multiple previous rebounds. This zone also aligns with the 200-day Exponential Moving Average (EMA) at $57.09, often regarded as critical long-term support.

HYPE currently trades below its shorter-term 20-day and 50-day EMAs, but the 200-day EMA continues to act as a stronger support reference. If the price can hold near $52 alongside rising staking activity, it suggests long-term holders may be absorbing available supply during this correction. Conversely, a decisive break below $52 would risk undermining the broader bullish setup and potentially trigger more selling pressure.

The next resistance to watch is $64, which would become a target if buyers regain control of the momentum. Ultimately, HYPE’s near-term trajectory depends on whether the staking surge translates into enough demand to stabilize prices within this important support range.

Market reaction so far reveals cautious trading as HYPE hovers near these critical levels.