HBAR under pressure, Descending channel hints at 24% downside move

Key Takeaways

What is driving Hedera’s current bearish outlook? 

A 6% price dip, declining volume, and rising short positions are reinforcing HBAR’s downward momentum.

What could potentially reverse HBAR’s bearish trend? 

A breakout above the descending channel and sustained ETF inflows could shift sentiment toward bullish.

Hedera [HBAR] has posted losses for the second day in a row.

Derivative data shows that, in addition to falling prices, an increase in short positions is reinforcing the asset’s bearish outlook.

HBAR price and major liquidation levels 

At press time, HBAR dropped 6% and was trading around $0.1925, showing a lack of market participation as trading volume plunged 38% to $512 million.

This price dip, along with the overall bearish market sentiment, has prompted traders to shift their bias toward short positions, as shown by the derivative tool CoinGlass.

As of press time, HBAR’s major liquidation levels stand at $0.1888 on the lower side (support) and $0.1972 on the upper side (resistance). At these levels, traders are over-leveraged, holding $2.90 million in long positions and $7.24 million in short positions.

Source: CoinGlass

As the asset’s price continues to fall, traders’ $2.90 million worth of long positions are on the verge of liquidation and will be liquidated if the price crosses below the $0.1888 level.

Looking at these positions and trader interest, it appears that those with a bearish outlook are currently dominating the asset and strongly believe that HBAR’s price will not surpass the $0.1972 level.

HBAR price action and technical analysis 

AMBCrypto’s daily chart analysis shows that HBAR is in a clear downtrend.

This is due to two key factors: the token is trading below its 200-day Exponential Moving Average (EMA) and was moving within a descending channel pattern, bounded by defined upper and lower trendlines.

Source: TradingView

The chart indicates that HBAR is beginning to form a bearish candlestick pattern. With today’s decline, this pattern has been partially confirmed, suggesting a continuation of the downtrend.

If the current downward momentum persists and HBAR’s daily candle closes below $0.188, it could trigger a deeper decline. In that case, the price may drop by more than 24%, potentially reaching $0.142 in the near future.

Additionally, the Average Directional Index (ADX) currently stands at 34.24, well above the key threshold of 25. This reading signals strong directional momentum, further reinforcing the bearish outlook.

Meanwhile, the Supertrend indicator continues to show a red signal, confirming the asset’s bearish trend.

HBAR potential reversal conditions 

On the other hand, HBAR’s bearish outlook could only shift if the asset’s price breaks out of the channel pattern and closes a daily candle above it; otherwise, the bearish outlook remains intact.

In addition, another factor strengthening HBAR’s bullish outlook is the recent approval of the spot HBAR ETF (Exchange-Traded Fund) in the United States. This has opened the door for traditional investors and institutions to participate. 

Following its launch, the ETF issuer Canary Capital’s HBR recorded a massive $45 million inflow, indicating rising investor interest and confidence in the asset.