Hedera has managed to experience a short-term reaction rally after reaching a local bottom on December 19. Since that date, the HBAR price has increased by approximately 11% as this news is being prepared for publication. However, this movement is not enough to change the overall picture. While HBAR has declined by nearly 50% in the last three months, it continues to remain weak in the last seven days.
The issue is not just the price. The main concern is the behavior of capital. Although the price appears to have risen, underlying data is accumulating pressure. If unexpected support does not come, this rise could turn into a bull trap.
Capital Flow is Weakening: Risk of Dissolution is Increasing
The first warning comes from capital flow.
Chaikin Money Flow (CMF) tracks whether large wallets are putting money into an asset based on price and volume. When the CMF declines, it indicates that money is slowly exiting the market, even if the price is maintained.
In the daily chart, HBAR's CMF value is moving downwards and leans on a descending trend line that has indicated capital outflows for weeks. This trend line is extra risky because it connects lower lows of the CMF rather than the price. Over time, it shows that large players are reducing their positions.
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If the CMF dips below this trend line, it will confirm that we have entered an active exit period from weak money inflows. This situation aligns with the general picture that the HBAR price is still moving within a descending channel. In such a scenario, the continuation and permanence of the recent 11% rise seems difficult.
Shorts and Bitcoin: The Only Hope Light
Still, there is a possible counterforce.
Derivative data shows a serious tendency for short selling. Collective short position liquidations on Bitget have reached approximately $9.9 million compared to long position liquidations of around $6 million. This means there are about 50% more short positions than longs at current levels.
For this situation to gain meaning, the price must see external support.
That support may come from Bitcoin. Over the past seven days, HBAR's correlation with Bitcoin is around 0.85. Correlation indicates how similarly two assets move: 1 means almost completely identical movement.
If Bitcoin starts to rise, the HBAR price may be pulled up with it. This movement could drive the price up by causing short selling to close (short squeeze) rather than organic demand. Without a rise in Bitcoin, the excess of short selling will not be sufficient on its own.
Levels to Watch in HBAR Price
The HBAR price is currently very close to the lower trend line of the descending channel.
If HBAR loses the $0.10 region, the structure will deepen the breakdown, and the current long position liquidations may accelerate. This also confirms the CMF signal and leads to an extension of the downward trend.
For the upward movement to continue, HBAR needs to make a move towards Bitcoin support and the $0.13 region. This level coincides with the upper band of the last range and could trigger the liquidation of many short positions in the next 30 days.
Until then, risks still heavily tilt downward.
This 11% rise in Hedera resembles more of a 'dead cat bounce' movement. That is, a temporary recovery is occurring that is short-lived and not permanent in the overall downward trend.
As capital flow weakens, the overall downward outlook in the structure continues, and only a short squeeze driven by Bitcoin can prevent this deep breakdown. Unless this trigger comes, the pressure on the trend seems likely to continue.
