The cryptocurrency landscape is constantly changing, and Hedera (HBAR) is no exception. Over the past week, HBAR has seen its price dip by nearly 11%, breaking below key support levels. But could traders betting on further downside encounter a bear trap instead? Let’s dive into the recent price trends and understand the potential outcomes for HBAR investors.
HBAR’s Recent Price Action
On November 14, HBAR made headlines when it completed a bearish head-and-shoulders pattern, breaking below its neckline at $0.160. While such patterns typically signal bearish continuation, the price action in the past 24 hours has been surprisingly flat. This has raised questions about whether a bear trap could be forming, especially given the underlying market dynamics.
Understanding the Bear Trap Risk
Market data reveals an intriguing trend in HBAR’s spot and derivatives markets. On November 14, there was a net outflow of –4.03 million HBAR tokens, which flipped to a net inflow of 420,790 HBAR the following day. This dramatic swing signifies a shift in market behavior, with buyers absorbing the selling pressure.
Furthermore, short positions overwhelmingly dominate the derivatives market, with shorts accounting for 73% of all leveraged positions (approximately $16.71 million), compared to $6.09 million on the long side. This crowded short positioning creates the perfect setup for a bear trap, where even a slight price increase could force shorts to liquidate, pushing the price even higher.
The Role of RSI Divergence
Adding to the case for a potential reversal is the bullish divergence observed in the Relative Strength Index (RSI). Between October 17 and November 14, HBAR’s price made a lower low, but the RSI formed a higher low. This divergence often signals a short-term price reversal, making it a critical metric to watch.
If HBAR reclaims $0.160, it could trigger short liquidations and pave the way for a stronger rebound. A move above $0.180 would confirm the bear trap, forcing further short liquidations and potentially pushing the price higher. However, if HBAR falls below $0.155, the bearish projection remains intact, with a downside target near $0.113.
Your Guide to Navigating HBAR
Traders and enthusiasts keeping an eye on HBAR should focus on key resistance and support levels. Investing during such volatile market conditions requires careful analysis and the right tools.
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Disclaimer
This article is for informational purposes only and does not constitute financial or investment advice. Always conduct your own research and consult a professional before making financial decisions.
