Despite managing a modest 11% rebound since its local low on December 19, Hedera (HBAR) is in an extremely delicate technical position. Analyst Ananda Banerjee warned that this short-term bullish move does not alter the downward trend of the last three months.
Weak Hedera institutional accumulation deeply worries traders who are looking for a solid and sustainable recovery. HBAR’s price remains under heavy pressure due to a capital flow that is constantly weakening. According to official data, the asset still carries a drop close to fifty percent in the last quarter.
The Chaikin Money Flow (CMF) indicator shows a warning signal by pressing against a multi-week descending trendline. This behavior suggests that large capital players are gradually but persistently reducing their exposure in the market.
Institutional capital outflow conditions the success of any organic recovery attempt for the digital asset. In addition, trading volume does not currently support the recent price increase observed on the daily charts. Therefore, analysts consider that the current rebound could simply be a bull trap for optimistic buyers.
On the other hand, the derivatives market structure reveals a massive bias toward short positions, with accumulated liquidations of nearly 10 million dollars. However, a “short squeeze” only seems possible if the market receives a major external boost.
Dependency on Bitcoin is the key factor for Hedera to force the closing of these positions. With a correlation of 0.85, HBAR’s fate is closely linked to the behavior of the sector’s leading tecnology. The futures market shows a growing tension between sellers and the currently scarce buyers.
Can the correlation with Bitcoin save Hedera from a drop below ten cents?
Likewise, the 0.10 dollar level acts as the last line of defense before a deeper capitulation of prices. If Hedera loses this critical support, the technical structure of the descending channel would definitely break downward. The risk of a chain liquidation of the remaining long positions would increase drastically in that scenario.
Therefore, bulls must firmly defend the 0.21 dollar zone to try and reverse the sentiment. Defending the current support levels is vital to avoid a prolonged devaluation of the institutional token.
Furthermore, the lack of organic demand is temporarily compensated by speculative interest on exchange platforms. However, without a real improvement in Hedera institutional accumulation, the path to recovery will be extremely difficult and volatile.
Since money flow remains negative, the probability of the rebound failing is considerably high. The fragility of Hedera’s financial ecosystem is evident given the lack of its own unique catalysts. Institutional investors prefer to wait for signals of strength before committing new capital to the project.
What impact would a Bitcoin rally have on the forced liquidation of short positions in HBAR?
Only a Bitcoin push above its current resistance levels could drag Hedera toward a safety zone. In this scenario, forced covering by short sellers would act as an additional engine for the price. Liquidity generated by forced liquidations could drive the value toward the upper limit of the channel.
Therefore, traders must closely monitor market dominance and overall investor sentiment. Synchronization with the global bullish cycle is the only real hope for HBAR holders today.
Finally, the close of 2025 poses an existential challenge for many projects that have failed to capitalize on institutional interest. Hedera needs to demonstrate real-world utility and growing adoption to regain the lost trust of large funds.
The future of the governance network will depend on its ability to attract positive money flows in the coming months. Therefore, it is essential to pay attention to network updates and new strategic partners. The consolidation of a stable market floor will mark the beginning of a possible new phase of growth.
