Hedera’s native token, HBAR, has been lowered by two months as the bearish momentum grew heavier and heavier on the market.
Investor confidence in the short-term recovery is steadily eroding, with derivative traders bolstering their bearish bets on HBAR. This makes the token vulnerable to deeper reductions. The question now is, what does this mean for HBAR owners?
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Traders abandon HBAR and promote the risk of deeper decline
HBAR is currently down 15%, at $0.2077 over the past seven days. This double-digit price dip has weakened sentiment across the token derivatives market. According to Coinglass data, this was $350 million at the time of writing, a 26% drop since September 13th.
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Open profit measures the total number of unresolved futures or option contracts that have not yet been resolved. As this figure rises, it shows fresh capital and trader participation flow into the market.
Conversely, a sharp decline, especially during such price drops, suggests that traders are closing positions and withdrawing liquidity from assets. If escape continues, the lack of fluidity can exacerbate volatility and expose HBAR to more negative movements.
Furthermore, measurements of long/short ratios in HBAR indicate a greater tilt towards shorts, indicating that traders are increasingly betting on HBAR. At the time of writing, this is 0.86.
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The long/short ratio measures the percentage of long bets on short bets in the asset futures market. A ratio of more than one indicates a longer position than a short position. This shows bullishness as most traders expect their assets to rise.
However, like HBAR, the lower ratio means it is shorter than the longer positions in the market. This shows strong bearish sentiment as futures traders continue to bet on further price declines.
Hbar weakens below 20 days of EMA. Can the Bulls get back $0.2212?
On the daily chart, HBAR is well below its 20-day index moving average, checking a breakdown of the bullish structure of the spot market. At the time of this writing, this important moving average forms a dynamic resistance that exceeds the HBAR price by $0.2281.
The 20-day EMA measures the average price of assets over the last 20 days, giving more weight to recent prices. When an asset trades above the 20-day EMA, it shows bullish momentum, with buyers still in control and moving averages act as support during pullback.
Conversely, when prices slip under the EMA, they reflect weakening demand, inverting the indicator into resistance, and sellers determine the direction of the market. This puts the HBAR at risk of a decline of $0.1788.
Meanwhile, the rise in new demand for HBAR could surpass the price by $0.2212.