Bullish Divergence Challenges Bearish Control at HBAR's $0.16 Support

HBAR, the native token of Hedera Hashgraph, fell 1.7% to $0.170 on Monday as traders grappled with a crumbling support level and mixed signals about a potential rebound. The decline followed a 4.3% drop in the previous session, during which institutional selling intensified, pushing the token below critical technical thresholds, according to a CoinDesk report. Trading volume surged 71% above the daily average, with 67.16 million tokens exchanged at 04:00 GMT as the price collapsed below $0.1720. While the selloff temporarily bottomed near $0.1688, a late-session rebound to $0.1745 offered limited optimism, leaving analysts divided on whether the recovery is sustainable.

The sell-off has triggered discussions about potential market turning points. Technical analysts point to bullish divergence in the Relative Strength Index (RSI), a key indicator that suggests weakening bearish momentum, according to a CryptoNewsLand report. Veteran trader Matthew Dixon highlighted a long wick on October 11, indicating heavy selling that was swiftly absorbed, as evidence of a possible reversal. "Price has stayed flat or moved lower, but RSI is rising—this divergence often precedes a reversal," Dixon noted. However, RSI remains below 50, a level typically associated with bearish control, and a confirmed breakout above $0.19 would be needed to validate a sustained recovery.

Market structure remains bearish despite the recent rebound. HBAR tested $0.16 support in the latest session, with a critical juncture ahead if the level holds, according to a Yahoo Finance piece. Exchange inflows have plummeted 76% weekly, a pattern historically linked to consolidation before sharp rallies. Short positions now dominate futures markets, with $44.88 million in shorts versus $14.11 million in longs—a disparity that could backfire if buyers reclaim $0.19, triggering a short squeeze. "A 15% move above current levels could spark buying pressure as shorts unwind," one strategist noted.

The broader market context adds complexity. HBAR has fallen nearly 25% in a week amid $1 billion in futures liquidations, signaling a sharp shakeout. While trading volume remains robust at $351 million, open interest has declined to $151.94 million, reflecting reduced speculative activity. This contrasts with earlier this year, when a similar inflow collapse preceded a 117% rally from $0.13 to $0.29.

Investors remain cautious as HBAR navigates a broadening wedge pattern, a technical formation often preceding volatile breakouts. A sustained move above $0.19 could target $0.23, but bears retain control unless institutional buyers step in to defend the $0.16 floor. For now, the token's fate hinges on whether the recent rebound is a capitulation bottom or a temporary reprieve in a deeper correction.