Hedera can recover in the short term after hitting a low on December 19. Since then, the price of HBAR has increased by about 11% at the time of this news. However, this movement alone does not change the long-term outlook, as HBAR has still dropped nearly 50% over the past three months and remains weak over the past seven days.
The problem is not just the price, as the greater concern is the behavior of capital. Even if prices recover, fundamentals still show increasing accumulated stress. Therefore, unless an unlikely alliance comes in to help, this movement could turn into a bull trap.
Thai capital inflow is weakening while the risk of a correction is increasing.
The first warning sign comes from capital flow.
Chaikin Money Flow or CMF checks whether money from big wallets is entering or exiting an asset by considering price and volume. When the CMF moves downward, it indicates that investments are slowly flowing out, even if prices remain stable.
On the daily CMF chart, HBAR is declining and pressing against the downward trend line indicating continuous outflows for several weeks. This trend line connects the lower points of the CMF, not the price, which makes it even more dangerous. It shows that each major player is gradually reducing their holdings.
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If the CMF breaks below this trend line, it will confirm the shift from weak inflow to serious outflow, consistent with the overall structure where the price of HBAR is still moving within a downward channel. In this case, the latest 11% bounce is likely to be unsustainable.
Short and Bitcoin are the only two potential lifelines.
However, there is only one possible resistance.
Derivative data shows significant short-side pressure, with Bitget's short futures position having a nearly 9.9 million USD liquidation value compared to the long side of about 6 million USD, meaning there are about 50% more short positions than long at the current price level.
This point will only be significant if the price is supported by other factors.
That support may come from Bitcoin. Over the past seven days, the correlation between HBAR and Bitcoin has been close to 0.85. This level of correlation measures how much both assets move in the same direction, with a correlation value of 1 indicating nearly identical movements.
If Bitcoin rises higher, the price of HBAR may be pulled up as well, which such movements will result in short holders needing to close their positions, leading to a short squeeze instead of buying demand from fundamentals. However, if Bitcoin is not strong, the short gap alone will not be sufficient.
Price levels of HBAR to watch.
The current price of HBAR is near the lower trend line of the downward channel.
If HBAR breaks below 0.10 USD, the price structure will become more distorted, leading to a quicker liquidation of long positions, which will confirm the CMF signal and likely prolong the bearish trend.
To have a chance to rise again, HBAR needs support from Bitcoin and must run up to 0.13 USD, which aligns with the upper boundary of the previous price range and might trigger a large short liquidation in the next 30 days.
Until that time, risks remain tilted more towards the downside.
The 11% bounce of Hedera seems to be just a dead cat bounce because a dead cat bounce means a failed short-term recovery during a longer downtrend.
Capital flow is weakening. The structure remains bearish, and only a short-term bounce led by Bitcoin can prevent a deeper decline. Without such catalysts, the trend will continue to be pressured.
