Bullish Divergence Poses a Threat to Bearish Dominance at HBAR’s $0.16 Support Level

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Bullish Divergence Poses a Threat to Bearish Dominance at HBAR’s $0.16 Support Level

Bitget-RWA2025/10/24 16:14

By:Bitget-RWA

- HBAR dropped 1.7% to $0.170 as institutional selling pushed it below $0.1720, with 71% higher trading volume. - Technical analysts note RSI bullish divergence but bearish control persists, requiring a $0.19 breakout for validation. - Short positions dominate futures markets ($44.88M vs $14.11M), risking a short squeeze if buyers reclaim $0.19. - Market structure remains bearish despite temporary rebounds, with $0.16 support critical for avoiding deeper correction.

HBAR, which is the primary token for

Hedera

Hashgraph, slipped by 1.7% to $0.170 on Monday as traders faced uncertainty from weakening support levels and conflicting signals about a possible recovery. This drop came after a 4.3% decline in the previous session, where increased institutional selling drove the token beneath important technical markers, according to

a CoinDesk report

. Trading activity jumped 71% above the daily norm, with 67.16 million tokens traded at 04:00

GMT

as the price broke below $0.1720. Although the selloff briefly found support near $0.1688, a late-session bounce to $0.1745 provided only modest hope, leaving experts split on whether the rebound can last.

The recent decline has sparked debate about whether the market is nearing a turning point. Technical analysts highlight a bullish divergence in the Relative Strength Index (RSI), an important metric that indicates fading bearish pressure, as reported by

a CryptoNewsLand report

. Seasoned trader Matthew Dixon pointed to a long wick on October 11, which he said shows significant selling that was quickly absorbed—potentially signaling a reversal. "While prices have stayed flat or dipped, the RSI is climbing—this kind of divergence often comes before a reversal," Dixon explained. Still, the RSI remains under 50, a threshold usually linked to bearish dominance, and a decisive move above $0.19 would be needed to confirm a lasting recovery.

Despite the recent uptick, the overall market structure remains bearish.

HBAR

challenged the $0.16 support level in the latest trading, with a crucial test ahead if this level is maintained, according to

a Yahoo Finance piece

. Exchange inflows have dropped 76% over the week, a trend that has historically signaled consolidation before significant rallies. Short positions now dominate the futures market, with $44.88 million in shorts compared to $14.11 million in longs—a gap that could trigger a short squeeze if buyers push the price above $0.19. "A 15% rise from current prices could force shorts to cover, fueling additional buying," one strategist commented.

Wider market conditions add further challenges. HBAR has lost nearly 25% in the past week amid $1 billion in futures liquidations, indicating a major shakeout. While trading volumes remain high at $351 million, open interest has dropped to $151.94 million, showing less speculative involvement. This is in contrast to earlier this year, when a similar drop in inflows was followed by a 117% surge from $0.13 to $0.29.

Investors are staying cautious as HBAR forms a broadening wedge pattern, a technical setup that often comes before sharp price swings. If the price can hold above $0.19, a move toward $0.23 is possible, but bears remain in control unless institutional buyers defend the $0.16 support. For now, the token’s outlook depends on whether the recent bounce marks a true bottom or just a brief pause in a longer decline.

Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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