Hyperliquid Price Forecast: HYPE eyes gains following Sonnet BioTherapeutics' rebrand

Hyperliquid price today: $48

• Sonnet BioTherapeutics announced a merger deal with Rorschach and a rebrand to Hyperliquid Strategies.
• The new company is expected to hold $583 million worth of HYPE after the merger.
• HYPE eyes a further 38% gain but is facing resistance near a key ascending trendline.

Hyperliquid (HYPE) trades near $48 on Monday following Sonnet BioTherapeutics' (SONN) announcement that it has entered a merger agreement with Rorschach I LLC to launch as a new HYPE treasury company, Hyperliquid Strategies Inc.

Sonnet BioTherapeutics announces merger and launch of HYPE treasury strategy

Nasdaq-listed Sonnet BioTherapeutics announced a merger deal with Rorschach, a newly formed entity backed by investment firms Atlas Merchant Capital and Paradigm, to rebrand as Hyperliquid Strategies (HSI).

The new entity is expected to hold approximately 12.6 million HYPE tokens, valued at $583 million — based on the token's price when the agreement was signed — plus an additional $305 million in gross cash at closing. Sonnet stated that the gross cash proceeds of $305 million will be used to purchase more HYPE as it aims to establish one of the largest reserves for the token.

"Hyperliquid has broken out as a crypto project with real fundamentals: strong core contributors, exacting product quality, and meteoric growth," said Matt Huang, Co-founder of Paradigm, in the press release.

The company also added that following the completion of the potential merger, Sonnet will operate as a wholly owned subsidiary of HSI. Bob Diamond, co-founder and CEO of Atlas Merchant Capital, will become Chairman of the Board for Hyperliquid Strategies.

"We are delighted by this opportunity to partner with Sonnet in establishing a leading crypto treasury management strategy to ultimately deliver strong value to shareholders," said Bob Diamond in the press release. 

Hyperliquid Strategies will continue trading on the Nasdaq with a new ticker following the completion of the merger, which involves several investment firms, including Paradigm, Galaxy Digital, Pantera Capital, D1 Capital, Republic Digital, and 683 Capital, the press release stated.

The move follows a rise in demand for altcoin treasuries among low-cap publicly listed companies in the past quarter. In the past month, Eyenovia and Lion Group Holding also announced plans for a HYPE treasury.

Sonnet BioTherapeutics' stock spiked over 70% following the merger announcement, according to Google Finance data.

HYPE eyes further gains but faces key ascending trendline resistance

HYPE is facing resistance near an upper boundary ascending trendline after gaining nearly 25% last week. A move above this trendline could see HYPE stretch its rally by over 30% toward the $70 mark.

HYPE/USDT daily chart

However, a firm rejection could see HYPE find support near the lower boundary of a rising trendline if the 14-day Exponential Moving Average (EMA) fails to spark a price bounce. Further down, the $36 and $30 price levels could serve as key supports.

The Relative Strength Index (RSI) and Stochastic Oscillator (Stoch) are on the verge of retreating from their overbought regions, indicating signs of bullish fatigue.