Key Takeaways
Hedera (HBAR) emerged as one of the standout performers in the final quarter of 2024. Building on that performance, HBAR hinted at continuing the uptrend earlier this month.
However, as January nears its final week, the altcoin appears to have lost this momentum.
With this change in trend, HBAR’s price risks undergoing a notable decline if nothing is done to alter the current outlook. Here is why.
On Jan. 16, HBAR rallied to $0.40. Thereafter, the price dropped, consolidating between $0.35 and $0.37.
This decline led to the formation of a bull flag on the 4-hour chart, which indicated that the range-bound movement would only last a while, after which the token’s uptrend would continue.
For context, a bull flag is an upward continuation pattern formed by a sharp upward movement known as the “flagpole,” followed by a period of consolidation that forms a rectangular shape, referred to as the “flag.”
But on Jan.20, HBAR price dropped below the support line of the flag at $0.35. This breakdown invalidated the bullish thesis and extended the decrease, placing the cryptocurrency’s market value at $0.32.
The daily chart’s assessment also seems to agree with the signs displayed in the 4-hour timeframe. Specifically, CCN examined the Chaikin Money Flow (CMF).
The CMF ranges between -1 and +1 and measures the level of accumulation and distribution around a cryptocurrency. Reading close to + indicates a high level of accumulation, while those near -1 imply rising distribution.
As of this writing, the CMF on the HBAR/USD daily chart has dropped below the zero midpoint. Dropping under this neutral region confirms that buying pressure around the altcoin has faded.
Instead, the token is facing an increasing level of selling pressure. Should this CMF reading continue to slide, then HBAR’s price might follow suit.
In addition, the decline in HBAR’s price has driven it below the 0.786 Fibonacci retracement level, which is a significant resistance zone.
This decline below this level indicates that the token’s ability to resist another downtrend has become significantly weaker. Therefore, it is unlikely that the HBAR will experience a quick bounce in the short term.
Therefore, as stated above, an extended decrease could be expected amid the rising selling pressure. If this trend remains the same, HBAR’s price might decrease to the 0.50 Fib retracement point at $0.22, an anticipated 30% decline.
However, the anticipated price decrease may not materialize if demand for the token rises. There has also been speculation that HBAR, a U.S.-founded cryptocurrency, could secure a spot in Donald Trump’s crypto reserve.
The approval of the HBAR spot exchange-traded fund (ETF) could also impact a positive price movement.
This 30% correction might not become a reality if that happens sooner than expected. On the contrary, HBAR could rally beyond $0.40 and inch toward $1.