Important points
What could be the cause of Hedera’s current bearish outlook?
A 6% price decline, declining volume, and increasing short positions are fueling HBAR’s downward momentum.
What could potentially reverse the bearish trend in HBAR?
If the ETF breaks out of the descending channel and inflows continue, sentiment could turn bullish.
hedera [HBAR] It was the second consecutive day in the red.
Derivatives data shows falling prices, along with an increase in short positions, are reinforcing the bearish outlook for the asset.
HBAR price and major liquidation levels
At the time of writing, HBAR was down 6%, trading around $0.1925, indicating a lack of market participants as trading volume fell 38% to $512 million.
This price drop and the overall bearish sentiment in the market led traders to shift their bias towards short positions, as shown by the derivatives tool CoinGlass.
At the time of writing, HBAR’s key liquidation levels are $0.1888 on the downside (support) and $0.1972 on the upside (resistance). At this level, traders are overleveraged, holding long positions of $2.9 million and short positions of $7.24 million.
Source: Coin Glass
As the asset’s price continues to fall, traders’ long positions worth $2.9 million are on the verge of liquidation, and will be liquidated if the price falls below the $0.1888 level.
Looking at these positions and trader interest, it appears that those with a bearish outlook are currently in control of this asset and strongly believe that HBAR price will not rise above the $0.1972 level.
HBAR price fluctuation and technical analysis
AMBCrypto daily chart analysis shows that HBAR is in a clear downward trend.
This is due to two important factors. The token was trading below its 200-day exponential moving average (EMA) and remained within a descending channel pattern bounded by defined upper and lower trendlines.
Source: TradingView
The chart shows that HBAR is starting to form a bearish candlestick pattern. Today’s decline partially confirmed this pattern and suggested a continuation of the downtrend.
If the current downward momentum continues and the HBAR daily candlestick closes below $0.188, it could trigger further decline. In that case, the price could drop more than 24% and reach $0.142 in the near future.
Moreover, the average directional index (ADX) is currently 34.24, well above the important metric of 25. This number shows strong directional momentum and further strengthens the bearish outlook.
Meanwhile, the Supertrend indicator continues to show a red signal, confirming the bearish trend of the asset.
Potential reversal conditions for HBAR
On the other hand, the bearish outlook on HBAR can only change if the asset’s price breaks out of the channel pattern and the daily candlestick closes above the channel pattern. Otherwise, the bearish outlook remains in place.
Additionally, another factor reinforcing the bullish outlook for HBAR is the recent approval of a spot HBAR ETF (exchange traded fund) in the US. This opens the door for traditional investors and institutions to participate.
ETF issuer Canary Capital’s HBR has recorded massive inflows of $45 million since its launch, demonstrating growing investor interest and confidence in the asset.