Hedera's native token has dropped 18.5% over the past week and continues to test support along a month-old falling wedge pattern, but technical indicators suggest institutional money may finally be positioning for a reversal after multiple false signals.
What to Know:
- HBAR has formed a bullish divergence between price and momentum indicators for the second time since October, but the latest signal includes confirmation from capital flow metrics that previous attempts lacked.
- The token must hold above $0.145 to preserve its wedge pattern, while a break above $0.165 would confirm buyer strength and potentially open a path toward $0.186 or higher.
- The Chaikin Money Flow indicator has turned upward after weeks of decline, suggesting large holders are accumulating despite the price weakness that has dominated November trading.
Technical Pattern Shows Strain Despite Bullish Framework
HBAR remains within a falling wedge formation that began October 10, though the structure now sits at its lower boundary. The pattern typically resolves upward in technical analysis, but pressure continues to mount as the token trades near critical support.
The monthly chart reflects broader weakness. HBAR has declined steadily through November, testing the patience of traders who entered positions expecting the wedge to provide a floor.
The price action has not broken the pattern yet, but the margin for error has narrowed considerably.
Market observers note the wedge's lower trend line has only two clear contact points. That limited history makes the support level less reliable than structures with multiple confirmed touches. A close below $0.145 would break the pattern entirely and shift the technical outlook to bearish.
Momentum Indicators Diverge From Price Action Again
The Relative Strength Index formed a higher low between October 11 and November 16 while HBAR's price made a lower low during the same period. This divergence signals weakening selling pressure even as the price continued to decline. RSI measures momentum rather than price, and the pattern suggests buyers may be regaining control beneath the surface of visible trading.
HBAR produced a similar divergence between October 11 and November 14.
That signal failed to produce a sustained rebound. The price continued lower through November, which explains why the token has returned to wedge support.
Technical analysts typically view RSI divergences on daily charts as precursors to trend changes, but confirmation from other metrics often determines whether reversals materialize.
The current divergence appears as HBAR tests its final meaningful support within the wedge. If the lower trend line holds, the setup has better odds of succeeding than previous attempts. Market conditions and complementary indicators will determine whether this signal produces different results than the failed divergence from earlier this month.
Capital Flow Metrics Provide Missing Confirmation
The Chaikin Money Flow indicator has shifted course after declining since November 10. CMF tracks whether large wallets are adding or removing capital from a token, providing insight into institutional positioning that price action alone cannot reveal. The metric has curled upward in recent sessions, creating the first potential confirmation signal for the RSI divergence.
Earlier rebound attempts failed because CMF continued falling even as RSI suggested momentum was improving. The disconnect between the two indicators undermined bullish cases and allowed selling pressure to persist. This time CMF supports rather than contradicts the RSI signal, creating a more coherent technical picture.
The indicator must move above zero to confirm rebound strength. As long as CMF holds above its own trend line, the inflow signal validates the divergence pattern. If CMF turns lower again before reaching positive territory, the setup loses credibility immediately. The alignment between momentum and capital flow creates the primary distinction between this divergence and previous failed signals.
Price Thresholds Will Determine Pattern Validity
A daily close below $0.145 would break the wedge and expose deeper downside targets. That level represents the line between maintaining the bullish structure and invalidating the entire pattern. Failure at this support would likely trigger additional selling as traders exit positions based on the broken formation.
HBAR must reclaim $0.165 to validate the rebound case. That target sits roughly 10% above current levels and would confirm buyers have responded to the divergence signals. A sustained move above $0.165 would open the path toward $0.186, which aligns with the wedge's upper trend line.
Breaking above $0.186 would complete the bullish resolution of the falling wedge. That development could propel HBAR toward $0.219 or higher, depending on broader market conditions and trading volume. The progression requires each level to hold as support after the initial breakout, a process that typically takes multiple sessions to unfold.
Understanding Key Technical Indicators
The Relative Strength Index measures the speed and magnitude of price changes on a scale from zero to 100, with readings above 70 indicating overbought conditions and readings below 30 suggesting oversold territory. Bullish divergence occurs when RSI forms higher lows while price forms lower lows, signaling momentum is improving despite continued price weakness.
The Chaikin Money Flow combines price and volume data to estimate buying and selling pressure from large holders. Positive readings above zero indicate accumulation, while negative readings suggest distribution. The indicator provides context for whether institutional participants are supporting or opposing price movements visible on the chart.
A falling wedge forms when price moves lower between two converging trend lines, with the pattern typically resolving upward as selling pressure diminishes. The structure indicates sellers are becoming less aggressive over time, though confirmation through a breakout above the upper trend line is required before the pattern is considered complete.
Closing Thoughts
The latest bullish divergence carries more weight than previous signals because capital flow metrics have finally turned upward. Whether that alignment produces a successful rebound depends on HBAR's ability to hold above $0.145 while building momentum toward the $0.165 threshold.