HBAR’s rate hike is in danger of collapsing – here’s why.
After hitting a local low on December 19, Hedera made a short-term swing. Since then, HBAR's price has risen about 11% at press time. But that move alone won't change the broader picture. HBAR is still down nearly 50% over the past three months and has remained weak over the past seven days.
The problem is not just price. The biggest concern is the nature of capital. As prices rise, the underlying data shows a build-up of stress. Unless an unlikely partner steps in, this move risks turning into a bull trap.
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Capital inflows are weakening as the threat of collapse looms.
The first caveat comes from capital flows.
Chaikin Money Flow, or CMF, tracks whether a large wallet is entering or leaving an asset using value and volume. As the CMF trends downward, it indicates that capital is slowly being withdrawn even as prices rise.
On the daily chart, HBAR's CMF is moving down and pushing against a downtrend line, leading to capital outflows for weeks. This trend ties lower lows in CMF, not price, making it more risky. It indicates that the big players are reducing their exposure over time.
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If the CMF breaks below this trendline, it confirms a transition from weak inflows to active inflows. That HBAR price is still in line with the broader structure in which it is trading in a descending channel. In that case, the recent 11% rally may not be able to continue and sustain itself.
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The resulting data show a severe brevity bias. On Bitget, aggregate short liquidity is close to $9.9 million, compared to long-term liquidity of $6 million. That means there are 50% more shorts than talls at the current level.
This value is only important if he gets help from somewhere else.
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That help could come from Bitcoin. Over the past seven days, HBAR's correlation to Bitcoin sits near 0.85. Correlation measures how closely two assets move, meaning 1 means they move in the same direction.
If Bitcoin goes up, the value of HBAR can be dragged down with it. That movement can force shorts to cover up, creating a short squeeze rather than organic demand. Without the strength of Bitcoin, short volatility alone is not enough.
HBAR price levels to watch
The HBAR price is currently sitting near the downtrend of the downtrend channel.
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If HBAR misses the $0.10 area, the structure will break down further, and current long drawdowns may accelerate. That confirms the CMF signal and extends the downtrend.
To survive to the upside, HBAR needs Bitcoin support and a push towards $0.13. That level is consistent with the top of the immediate range and could trigger a wave of short liquidation over the next 30 days.
Until then, the risk remains skewed low.
Hedera's 11% throw looks like a dead cat ball. A dead cat toss represents a short-term rally that has failed in a broader downtrend.
The flow of capital is weakening, the structure is weak, and only a short squeeze led by Bitcoin will prevent a deeper crash. Without that trigger, the trend remains under pressure.
