Hedera (HBAR) is currently at a pivotal juncture. Its price action indicates potential for bullish and bearish outcomes as it tests critical support levels. While recent technical indicators point to possible bullish momentum, market sentiment remains cautious, influenced by fluctuations in trading volume and open interest.
Recent analysis suggests that HBAR may form a cup-and-handle pattern, a key technical formation that could signal a bullish continuation if certain resistance levels are breached.
This pattern, illustrated by the yellow dotted line, indicates that Hedera could see an upward breakout if it clears resistance at the top of the chart, marked by the red line.
The 50-week and 200-week moving averages, currently trending downward, reflect a current bearish sentiment, but the price approaching a critical support zone may offer an opportunity for reversal.
In late 2023, the trading volume saw an uptick, indicating growing investor interest as HBAR’s price neared a descending trendline. This activity surge suggests that traders closely monitor the asset, anticipating potential price movement as it approaches key technical levels.
Market sentiment shifts with funding rate movements
The relationship between HBAR’s price movements and its funding rates, tracked through open interest data, has highlighted volatility. In early November, a spike in the funding rate coincided with a sharp increase in HBAR’s price, briefly reaching nearly $0.40.
However, the market sentiment shifted as the price corrected, leading to negative funding rates in mid-November, a sign of bearish sentiment and potential short positions. By late December, the funding rate had stabilized, suggesting a period of equilibrium, although market participants remain watchful of any signs of a reversal.
Technical indicators point to bearish sentiment
As of Dec. 28, 2024, technical indicators such as the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest HBAR may still be under bearish pressure. The RSI stands at 41.16, indicating that HBAR is nearing oversold territory, which could signal an impending price rebound.
However, the MACD is still bearish, with the MACD line below the signal line to back the reason for the bearish sentiment. This divergence suggests that unless the MACD moves into positive territory, the price is likely to come under selling pressure in the short run.
