Hedera (HBAR) price has fallen 4.27% in the past 24 hours and is trading around $0.16, down almost 8% this week after losing momentum from last week’s brief rally. While the sideways movement indicates hesitation, two important trends suggest the pullback may be short-lived.
HBAR price could still recover if the support at $0.16 holds and the price manages to regain $0.19. Here’s how:
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Selling pressure weakens as bearish bets pile up—could there be a short squeeze?
The amount of HBAR being transferred to exchanges has fallen sharply, which typically indicates investors are holding rather than selling. From October 13 to 20, weekly foreign exchange inflows decreased by 76% from $6.13 million to $1.47 million.
A similar pattern emerged in late June, with inflows plummeting from $7.72 million to $632,000 (down 90%). Within a month, the price of HBAR nearly doubled from $0.13 to $0.29.
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At the same time, traders in the futures market are facing a high probability of a decline. The total short bet was $44.88 million, while the long position was only $14.11 million. This means that while 76% of traders are expecting further downside, the imbalance could quickly backfire.
If HBAR price closes above $0.19, where the largest liquidation cluster exists, many short positions will be forced to close. An increase of around 15% from current prices could create buying pressure (via a short squeeze) as shorts unwind.
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This combination (less selling on exchanges and too many traders betting on HBAR) could fuel a surprise rally if the price sustains long enough to break above $0.16 and test higher levels.
HBAR price needs to hold $0.16 before bulls take over
There is still room for recovery in HBAR’s price structure, but everything now depends on how it behaves around $0.16 and $0.19. The token continues to trade inside an expanding wedge. This is a formation where both trend lines are moving apart, often indicating increased volatility and a potential breakout if buyers regain control.
If HBAR rises above $0.16 and above $0.19, it could move towards $0.23. A close above $0.23 means price has broken above the expanding wedge’s upper trend line. This could result in the unwinding of leveraged positions and a short squeeze event. This breakout could pave the way for $0.25 and $0.30, areas where the rally has stalled so far.
The Relative Strength Index (RSI), which tracks the speed and strength of price movements, supports this view. From June 22nd to October 10th, HBAR price made new lows and RSI formed higher lows.
This bullish divergence typically suggests that selling pressure is easing, even though prices have not yet risen. Combined with an expanding wedge, this increases the likelihood of a reversal once HBAR price confirmation arrives.
However, the lower trendline of the wedge is weak as it only has two clear touchpoints. If $0.16 fails and $0.15 breaks out, that boundary could collapse, pulling HBAR down toward $0.12 and invalidating the rebound setup.
