Hedera (HBAR) has experienced a decline of approximately 3.5% in the past 24 hours, despite managing to maintain around 6% gains over the past week. This recent fluctuation indicates a growing tension between buyers and sellers in the market. An alarming price warning signal has emerged once again on Hedera’s charts, reminiscent of a recent scenario that led to a significant market crash exceeding 40%. However, current trader positioning, demand strength, and technical support levels suggest that a similar outcome may not be imminent.
The current price of Hedera is forming a falling wedge pattern on the daily chart. This formation, characterized by two downward-sloping trendlines that converge, typically indicates the potential for a breakout, as selling pressure diminishes over time. The recent weekly gains in HBAR suggest a recovery attempt, with the price attempting to reach the upper resistance of the wedge, signaling buyers’ attempts to regain control over the market.
Despite these positive indicators, a critical signal indicating caution persists. Between November 23 and February 17, Hedera’s price illustrated a lower high, indicating that its recovery did not reach previous peaks. In contrast, during the same timeframe, the Relative Strength Index (RSI) – a key momentum indicator – registered a higher high. This phenomenon, known as hidden bearish divergence, suggests that sellers maintain control even as momentum increases, usually signaling a continuation of the broader downtrend.
Such hidden bearish divergence was seen earlier, between November 23 and January 14, resulting in a sharp 44% crash. This history raises concerns about potential pullbacks for Hedera, but current underlying conditions suggest a different landscape this time around.
In January, the previous crash was driven by excessive bullish positioning, with open interest nearing $68 million, indicating a high volume of leveraged futures positions. The positive funding rates at that time signaled that many traders were anticipating rising prices, creating a precarious situation. As the price began to fall, long positions were liquidated, exacerbating the decline. Currently, open interest stands at approximately $61 million, lower than before, despite the continued weekly gains in HBAR. More notably, negative funding rates indicate that traders are not aggressively betting on price increases, reducing the likelihood of a large liquidation event.
Technical factors further illustrate trader caution, with HBAR trading near its 20-day exponential moving average (EMA). Historically, this EMA has acted as a dynamic resistance level, and breaches below it have previously accelerated declines. In contrast, traders appear more cautious at this juncture.
Buyer behavior also shows signs of resilience, as the Money Flow Index (MFI) – a measure of real capital entering the asset – is currently rising despite a correction in prices. This uptick indicates that dip buyers are entering the market and absorbing selling pressure, which could mitigate the risk of a crash similar to that observed earlier.
Looking ahead, HBAR is approaching critical price levels that traders will closely monitor. Key support is positioned around $0.092; if this level is breached, it may further decline to $0.083, with the possibility of extending downward to $0.068 if selling pressure escalates. On the upside, reclaiming the $0.107 mark is vital, as it signifies wedge resistance and a pivotal breakout zone. A breach above this level could pave the way for gains toward $0.124 and potentially higher.
Currently, Hedera is confronted with familiar warning signs; however, the interplay of trader positioning, dip-buying strength, and technical support suggests that the outcome may not resemble past crashes. The next movement—whether it breaches above $0.107 or falls below $0.092—will likely determine the direction of Hedera in the near future.
