Asset manager 21Shares aims to bring institutional exposure to the DeFi space with its latest HYPE ETF filing. Meanwhile, the token is facing pressure as it tests key support levels.
Summary
- 21Shares files for the 2x leveraged HYPE ETF, targeting double the daily returns.
- Leverage exposure will be achieved using swaps, eliminating the need for token custody.
- HYPE token is testing crucial support at $34-$35 after a recent 7% drop, with bearish indicators like a MACD crossover and RSI suggesting further downside risk.
- If HYPE fails to hold the support level, it could see a decline to $30, but a break above $37.50 would signal a potential reversal.
21Shares has filed with the U.S. Securities and Exchange Commission (SEC) for approval of a 21Shares 2x Long HYPE ETF. The proposed fund aims to deliver double the daily returns of Hyperliquid, offering exposure to the DeFi token. If approved, it would be the first U.S.-listed leveraged ETF to track the fees and perpetual market performance of a live DeFi protocol.
The filing, submitted on October 16, outlines that the 21Shares 2x Long HYPE ETF seeks to replicate twice the daily performance of HYPE (HYPE), before fees and expenses. The fund will invest in a combination of swap agreements, options, and possibly Spot HYPE Exchange-Traded Products (ETPs), though no U.S.-based Spot HYPE ETPs are currently available for investment.
21Share’s proposal aims to provide exposure to HYPE’s perpetual futures system using a daily reset structure, which is unconventional compared to typical crypto funds. Instead of holding tokens directly, the ETF will utilize swap derivatives to achieve leveraged exposure to HYPE. This unique structure allows investors to benefit from the growth of the DeFi ecosystem without the need for token custody.
Meanwhile, other top asset managers, including Bitwise, have submitted similar proposals for a spot HYPE ETFs, reflecting growing institutional interest in exploring DeFi assets through regulated investment vehicles.
HYPE ETF buzz fails to boost token price
Despite the latest developments, the HYPE token is currently under pressure. Currently trading around $34, HYPE has dropped nearly 10% in the last 24 hours, per crypto.news data. Based on daily charts, the DeFi coin is currently testing support around the $34-35 region, with recent price action showing a downward trend. This move follows a sharp correction from recent highs, mirroring the broader market slide following last week’s $19.3 billion liquidation.
HYPE token price chart | Source: TradingViewAlthough Hype momentarily rebounded to $43.24, fueled by the launch of the HIP-3 upgrade earlier in the week, bulls failed to maintain the uptrend. The 30-day simple moving average (SMA) currently sits around $45.27, well above the current price, underscoring sustained weakness and confirming that HYPE remains in a bearish phase.
Meanwhile, the Moving Average Convergence Divergence (MACD) is showing a bearish crossover, with the MACD line at –3.19, well below the signal line at –2.27. This confirms that the market is currently dominated by sellers, and the negative histogram bars suggest that the selling momentum is continuing to increase.
If the HYPE price fails to hold the support around $34-35, a further drop toward $30 may be in the cards. On the flipside, a recovery above $37.50 would signal a potential reversal, but such a move would require significant buying interest to break above the current resistance.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
Source: https://crypto.news/21shares-files-for-2x-leveraged-hype-etf-as-token-tests-critical-support/
