Hedera has fallen more than 10% in the last 7 days. This decline is not just a simple correction. The HBAR price structure is weakening, funds are flowing out, and investor sentiment has dropped to its lowest level in months.
These signals indicate an increasing risk of a deeper decline. Meanwhile, bottom buyers and derivative positioning also hint at the possibility of a limited rebound. Whether HBAR will decline further or consolidate depends on several key price levels.
Head-and-shoulders pattern, CMF decline... structural risk signals
The price chart indicates that Hedera is approaching the stage of completing a head-and-shoulders pattern. If the neckline breaks, it often acts as a signal for a downward reversal.
The neckline for HBAR price is around $0.102. If the daily close forms below this level, a decline exceeding 20% is expected, similar to past cases observed in similar structures.
This risk can also be confirmed by the Chaikin Money Flow (CMF) indicator. CMF measures whether funds are flowing in or out by combining price and volume. If the CMF falls below 0, it is interpreted as a signal of net fund outflow.
The CMF for HBAR has been pushed below the downtrend line and has clearly fallen below 0. The last instance where the CMF dropped sharply like this was in early December, after which Hedera declined by nearly 25%. This suggests that the current price weakness is based on actual selling pressure rather than a mere decrease in trading volume.
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As long as the CMF remains negative and the neckline is under pressure, the bearish structure will persist.
Positive sentiment decline... double pressure
Price weakness is also confirmed in sentiment data.
Positive sentiment tracks favorable discussions about the asset across various platforms, including market and social media. When positive sentiment falls to a local low, it indicates a contraction in investor sentiment and a decrease in the motivation to buy at lower prices.
Positive sentiment towards Hedera has fallen to its lowest level since late October last year. Historically, similar sentiment lows have closely correlated with price declines.
On November 9, when HBAR was trading around $0.17, sentiment recorded a local low. Within two weeks, the price slid to about $0.13.
The current situation is similar. Sentiment is weakening first, while the price is still holding above key support levels. This divergence often results in prices dropping further to align with investor sentiment levels. With both structure and sentiment showing a downward trend, the risk of decline has increased.
Hedera's buy-the-dip and derivatives... expecting a rebound
Bearish signals continue, but some support signals are being detected gradually.
According to spot exchange data, while HBAR price corrected nearly 5%, net outflows increased over the past two days. Net outflows occur when withdrawals exceed deposits and are generally a signal to buy or hold long-term. On January 24, net outflows were about $1.41 million, increasing to about $1.6 million on January 25. This suggests that buying interest has emerged after recent sell-offs.
Derivative data provides another basis. In the perpetual contract market on the Bitget exchange, the cumulative short position liquidation exposure over the past seven days reached about $7.4 million, while long position liquidation amounted to about $4.28 million. The overall short ratio is reported at 70%, indicating that many traders are betting on further declines.
When there are this many short positions compared to longs, even a slight price rebound can trigger forced liquidation of short positions. Such liquidation orders can increase upward momentum. Consequently, a narrow window may open for a rebound due to bearish positioning.
Key price range to watch for HBAR
HBAR price movements are now showing the final answers.
On the downside, the key range is between $0.100 and $0.102. If a daily close occurs below this range, it will confirm that the head-and-shoulders pattern has broken down, opening the possibility for further declines down to $0.080, which corresponds to the expected 20% drop.
To switch to an uptrend, Hedera must first recover $0.105 and show short-term stability. The real test is $0.112, which aligns with a key Fibonacci level and resistance at the right shoulder. A clear breakout above $0.112 would invalidate the right shoulder, weakening the bearish pattern and likely triggering a large-scale short squeeze.
In this case, HBAR price may rise further to $0.128, reaching past supply and resistance zones.
Currently, the balance is being maintained in an unstable manner. While bearish indicators are accumulating, there is still a slight possibility of reversal through buying at low prices and short positioning. A few daily closings will determine the future leadership.
