The Hedera index has dropped by more than 10% over the past seven days, and the decline is not just a routine pullback. The structure of HBAR prices is weakening, capital is flowing out, and sentiment has fallen to its lowest levels in several months.
These signals together indicate an increased risk of a deeper correction. At the same time, dip buyers and derivatives positions provide a narrow path for recovery. Whether HBAR will break down or stabilize now depends on several key levels.
The head and shoulders pattern and the CMF breakdown indicate structural risks.
The price chart shows Hedera nearing the completion of a head and shoulders pattern. It often indicates a bearish reversal once the neckline is broken.
For the price of HBAR, the neckline is around $0.102. A daily close below this level would trigger an expected bearish move exceeding 20%, aligning with previous breakdowns from similar structures.
This risk is reinforced by Chaikin Money Flow, or CMF. The CMF measures whether capital is flowing into or out of an asset by combining price and volume. When the CMF drops below zero, it indicates net outflows of capital.
The CMF indicator for HBAR has now broken below the descending support line and has significantly dropped below zero. The last time the CMF dropped this sharply was in early December, before Hedera fell by approximately 25%. This tells us that the current price weakness is supported by real selling pressure, not just low volume divergence.
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As long as the CMF remains negative and the neckline remains under pressure, the bearish structure remains active.
The decline in positive sentiment adds a second layer of pressure.
The weakness in prices is now resonating in sentiment data.
Positive sentiment tracks the extent of positive discussion and comments surrounding the asset across social and market sources. When positive sentiments dip to their local lows, it often reflects waning confidence and decreased willingness to buy.
Hedera's positive sentiment has dropped to its lowest level since late October. Historically, similar low levels have closely aligned with price declines.
On November 9, the waves reached a local low while HBAR traded near $0.17. Within two weeks, the price dropped to around $0.13.
The current setup looks similar. The mood began to weaken first, while the price remains stuck above key support. This type of divergence often leads to a price drop that aligns with confidence levels. With both structure and sentiment heading downwards, the risk of a decline is clearly high.
Buying the dip and derivatives keep hopes for a Hedera reversal alive.
Despite bearish signals, there are early indications of support returning beneath the surface.
Spot exchange data shows that net outflows have increased over the past two days as the price of HBAR corrected by approximately 5%. Net outflows occur when more tokens exit exchanges compared to entering, which typically indicates buying or long-term holding. On January 24, net outflows were around $1.41 million, rising to about $1.60 million on January 25. This suggests that dip buyers have started to enter following the recent sell-off.
Derivatives data adds another layer. In the perpetual HBAR market on Bitget, the cumulative short liquidation exposure over the next seven days is around $7.40 million, compared to about $4.28 million in long liquidations. This 70% disparity in short positions means a significant portion of traders are positioned for further declines.
When sell exposure exceeds investment by this margin, even a moderate price recovery can lead to short liquidations. These forced buy orders can accelerate upward moves. This creates a narrow window where bearish positioning can lead to a rebound.
Critical HBAR price levels to track now.
The current price movement of HBAR holds the final answer.
On the downside, the key level is between $0.100 and $0.102. A daily close below it will confirm the breakdown of the head and shoulders and open the way towards $0.080, aligning with a projected 20% decline.
On the positive side, Hedera must first reclaim $0.105 to show short-term stability. The real test comes at $0.112, which aligns with a key Fibonacci level and right shoulder resistance. A clean move above $0.112 would invalidate the right shoulder, weaken the bearish pattern, and likely lead to a significant wave of short liquidations.
If that happens, the price of HBAR could extend towards $0.128, where previous supply and resistance are present.
Currently, the balance remains fragile. Bearish indicators are rising, but the buying on dips and short positions leave the door slightly open for a reversal. The upcoming daily closes will determine which side will dominate.
