Hedera (HBAR) has recorded a strong short-term rally in recent trading sessions, pushing price action closer to a key resistance zone. The surge briefly reignited optimism across the market, with many traders positioning for a potential bullish breakout.
However, HBAR has once again stalled at a price level it has failed to reclaim for several weeks. As selling pressure builds near resistance, bullish traders are now facing elevated risk, particularly those using high leverage.
Rising Downside Risk for HBAR Traders
Current derivatives data suggests that most HBAR traders remain heavily biased toward long positions, reflecting strong bullish sentiment. Many market participants appear to be betting on a continuation move to the upside, despite unresolved technical barriers.
Liquidation heatmap data highlights a high-risk zone between $0.124 and $0.122. If price revisits this range, approximately $6.23 million worth of long positions could be forcibly liquidated. Such an event would likely intensify selling pressure and weaken bullish confidence.
Forced liquidations often accelerate downside moves. As leveraged positions are wiped out, additional sell orders enter the market, increasing volatility and pushing prices lower in a short period of time. Under these conditions, HBAR could remain vulnerable if spot demand fails to absorb the excess supply.
Overbought Signals Flash Warning Signs
Momentum indicators are also sending cautionary signals. The Money Flow Index (MFI) has surged above 80, placing HBAR firmly in overbought territory. This typically indicates that price has moved too far, too fast, rather than reflecting sustainable strength.
The MFI combines both price action and trading volume to measure buying and selling pressure. When the indicator remains elevated for extended periods, markets often experience pullbacks as buyers begin to lose control. For HBAR, this suggests that the current rally may be approaching exhaustion.
While overbought conditions do not guarantee an immediate reversal, they significantly increase the probability of a corrective move—especially when combined with strong resistance levels and aggressive long positioning.
Can HBAR Break Its Downtrend?
At the time of writing, HBAR is trading around $0.126, still below the critical $0.130 resistance. Price also remains capped by a six-week descending trendline, which has consistently rejected previous recovery attempts.
Given current market positioning and leverage exposure, the likelihood of another rejection at resistance remains elevated. If HBAR falls below $0.125, price could slide toward the $0.120 support zone, potentially triggering cascading liquidations and accelerating downside momentum.
That said, a bullish scenario cannot be ruled out. Strong spot market demand or a broader market recovery could shift sentiment. A confirmed breakout above $0.130, accompanied by increased volume, would allow HBAR to escape its downtrend and open the door toward $0.141, potentially reversing the current bearish outlook and restoring confidence among investors.
Disclaimer: This article is for informational purposes only and represents personal research and analysis. It does not constitute financial or investment advice. Readers should conduct their own due diligence before making any investment decisions. The author is not responsible for any financial losses.
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