Bitcoin (CRYPTO: BTC), Ethereum (CRYPTO: ETH), and XRP (CRYPTO: XRP) continue bleeding lower, but Hyperliquid (CRYPTO: HYPE) surged 10% after the decentralized exchange unveiled plans to add prediction markets through its HIP-4 proposal.

The Prediction Markets Play

Hyperliquid announced that HyperCore will support outcome-based trading, introducing fully collateralized contracts that settle within a fixed price range. 

These contracts enable prediction markets and options-like instruments without requiring margin trading or risking liquidations.

Moreover, Hyperliquid said there’s been extensive user interest in both prediction markets and options, with builders likely to develop additional applications once the infrastructure launches.

Building on momentum, the move follows HIP-3, which allows users to create custom perpetuals markets by staking HYPE tokens. 

HIP-3’s open interest recently hit all-time highs amid demand for commodities and stocks on the DEX.

How It Works

Outcome contracts let traders bet on specific price ranges without using leverage or facing liquidation risk. 

This differs from Hyperliquid’s existing perpetual futures, which require margin and can force liquidations during volatile moves.

The launch follows a cautious approach. 

Hyperliquid starts with a testnet featuring select prediction markets.  After testing, the platform may open to anyone who wants to create markets. Markets will use USDH, Hyperliquid’s stablecoin, for settlement.

HYPE Breaks Out

HYPE is up 4% on the day after climbing over 10% earlier in the session. The token is up 33% over the past month.

The token broke above a descending trendline that capped rallies since October, signaling a potential trend reversal. 

The Supertrend indicator sits at $25.55, well below current prices, while the Parabolic SAR at $24.67 also positions below price which is bullish.

Immediate resistance appears around $33-$34. 

A clear break above opens the door toward $40 and eventually a $60 target—representing nearly 90% upside from current levels. 

Key support sits at $30 near term, with stronger support at $25-$26.

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