Can Hyperliquid price rally above $40 as oil perps trading surge?

Hyperliquid price rallied over 8% on Thursday as demand for oil futures on the platform continued to hold steady on the platform.

According to data from crypto.news, Hyperliquid (HYPE) price shot up 8% to a four-week high of $37.3 on Thursday, March 12. At this price, the token is up 45% from its February low and 81% higher than its lowest point this year.

HYPE price jump came along with a jump in trading volume, which rose 42% over the past 24 hours to around $437 million. Its market cap was settled at $8.86 billion. 

CoinGlass data shows that its open interest has risen by 10%, suggesting that the major catalyst for its recent gains has come from the derivatives market, with traders opening more positions on the futures market.

A large share of this surge has been driven by activity in energy markets, especially the WTI perpetual, which tracks West Texas Intermediate crude oil. Oil prices have recently surged to four-year highs amid geopolitical tensions in the Middle East involving the U.S., Israel, and Iran. 

Reports indicate that Iran has threatened to block the Strait of Hormuz, a key maritime chokepoint. Iranian officials have noted that they would shift from reciprocal responses to continuous pressure as they attempt to push oil prices to as high as $200.

Investors are concerned about rising inflation as a result of surging oil prices. However, derivative traders were quick to capitalize on the volatility. Notably, WTI oil futures have become the most active HIP 3 contract on the platform, surpassing even precious metals like gold and silver, which had earlier dominated activity.

Open interest in the oil-linked contract has also grown significantly in the period. At the same time, the HIP 3 permissionless perpetuals market on Hyperliquid has recorded more than $1.2 billion in total open interest.

Besides the energy sector, Hyperliquid price also seems to have received a boost from traders turning to the platform as a 24/7 venue to speculate on geopolitical developments, particularly when traditional exchanges such as the CME and ICE are closed for the weekend or after hours.

On the 4-hour chart, Hyperliquid price has confirmed a breakout from an inverse head and shoulders pattern that had been forming since mid-February this year. When such a pattern is confirmed, it typically tends to signal a bullish reversal. In the case of Hyperliquid, it seems to have further strengthened the uptrend.

As such, HYPE is likely to continue its uptrend past the $40 psychological resistance level to $41.7, a target calculated by adding the height of the inverse head and shoulders formed to the price point at which the pattern was confirmed.

The MACD indicator suggested that bulls were still in control of the market with the MACD lines trending upwards and above the zero line. At the same time, the Chaikin Money Flow index showed a positive 0.16 reading, a sign that capital was flowing into the market, helping sustain the ongoing bullish momentum.