HBAR's Short-Sellers Face Rebound as Buyers Target Neckline

HBAR's recent price breakdown has ignited a debate among traders about the risks of a bear trap, as technical indicators and market positioning suggest a potential reversal could force short-sellers into a precarious position. The altcoin's 11% drop over the past week culminated in a breach of the head-and-shoulders pattern's neckline on November 13, a move analysts had long anticipated. However, the subsequent lack of follow-through and signs of waning seller momentum have raised questions about whether the bearish scenario will play out as expected .

The technical case for a bear trap hinges on the growing imbalance in leveraged positions and divergences in on-chain metrics. Derivatives data reveals that short exposure now dominates 73% of leveraged HBAR positions, a level often associated with increased vulnerability to sudden reversals . Meanwhile, the Relative Strength Index (RSI) has shown a bullish divergence, with prices hitting a lower low while RSI formed a higher low between October 17 and November 14-a pattern historically linked to short-term rebounds . If buyers reclaim the $0.160 neckline, it could trigger a cascade of short liquidations, potentially pushing the price toward $0.180 and beyond .

Compounding the uncertainty is the recent integration of Wrapped Bitcoin (WBTC) on the Hedera blockchain, which coincided with a $5.37 million inflow into the Canary HBAR ETF. This development, coupled with institutional demand, has injected liquidity into the network and softened the immediate bearish outlook . However, derivatives traders remain skeptical, as Open Interest (OI) in HBAR futures has fallen 5.96% in the last 24 hours, signaling a retreat in speculative activity .

The derivatives market's asymmetric positioning amplifies the risk of a short squeeze. On Bitget alone, short exposure totals $16.71 million, dwarfing long exposure of $6.09 million . Such crowded shorting creates a self-fulfilling dynamic: a modest rebound above $0.160 could force marginal short-sellers to cover positions, generating upward pressure. A push above $0.180 would further accelerate this process, potentially invalidating the bearish head-and-shoulders pattern and redirecting momentum higher .

Yet the bearish thesis retains legs. If HBAR fails to hold $0.160 and slips below $0.155, the RSI divergence weakens, and the projected 28% decline toward $0.113 becomes more likely . On-balance volume (OBV) data also supports this scenario, as repeated tests of an ascending trendline have failed to generate meaningful buying interest, suggesting volume is no longer underpinned by bullish conviction . A breakdown below $0.160 on strong volume would confirm the pattern's validity and trigger a wave of forced selling from leveraged longs.

The market's next move will depend on whether buyers can defend key support levels or if sellers regain control. For now, the stalemate near the neckline reflects a battle between algorithmic traders, institutional players, and retail investors, each with divergent views on HBAR's trajectory.