HBAR has fallen about 11% over the past week and finally broke below the neckline yesterday, completing the head-and-shoulders pattern we predicted on November 13th. Despite this decline, the last 24 hours have been surprisingly flat.
And although the structure still points to lower levels, early signs suggest that traders betting on a deeper downside may be walking into a bear trap instead. Here’s why:
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Rising selling and short selling add up – but the setup is not that simple
The HBAR spot flow shows an abrupt change in behavior after a failure. On November 14, HBAR recorded a net outflow of -4.03 million. This means more tokens will leave the exchange as buyers accumulate.
Today, the flow reversed to +420,790 HBAR after the pattern breakdown was confirmed.
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This is a 110% change in net flows from negative to positive. This is a clear sign that sellers have actively intervened after the pattern broke.
Derivatives markets are showing an even stronger trend. Bitget’s liquidation map alone has short exposure of $16.71 million and long exposure of $6.09 million. This means that shorts control 73% of all leveraged positions. This is about 2.7 times longer than long.
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This type of crowded position often fuels a bear trap risk situation where the price briefly reverses to the upside, forcing shorts to close out their positions at a loss.
The drop in HBAR prices did happen. However, in this situation it is dangerous to assume that this movement will continue uninterrupted.
One move could cause a rebound in HBAR prices, leading to short-term liquidation.
The price list includes the main reasons why bear traps are possible. HBAR broke below the neckline, but follow-through was weak. At the same time, the Relative Strength Index (RSI), an indicator that measures price momentum that indicates whether an asset is oversold or overbought, is showing a notable pattern.
From October 17th to November 14th, the price made lower lows and the RSI formed further lows. This is a bullish RSI divergence and often appears just before an attempted short-term reversal.
If the divergence develops, the first trigger is a return above $0.160, which is exactly where the neckline is. Recovering this level would put a block of large short positions at risk.
The liquidation map shows that shorts start to get squeezed once the price moves above this zone.
A break above $0.180 will confirm that the trap has fully triggered, leading to deeper short-term liquidation and giving HBAR room for an even stronger rebound. However, this trap only works if buyers hold major support levels.
Once HBAR falls below $0.155, the divergence weakens and the downtrend regains control. In that case, the head-and-shoulders prediction remains valid, paving the way for an early bearish target near $0.113.
