Hedera Faces Growing Concerns as Outflows Signal Weak Demand
In a worrisome trend over the past week, Hedera has experienced consistent outflows from its spot market, indicating a lack of confidence among investors. The surge in selling pressure underscores the diminishing demand for the altcoin, casting doubt on its ability to maintain support above the crucial $0.20 level.
The recent period has seen significant outflows totaling over $17 million from HBAR spot markets, with a mere $1.78 million inflow recorded on January 19, according to data from Coinglass. Spot outflows signify investors withdrawing capital from an asset's spot markets, typically by selling off their holdings and reallocating funds. This trend reflects weakening demand and heightened selling pressure, potentially driving the asset's price downwards.
The sustained outflows of HBAR point to a prevailing bearish sentiment in the market, as traders opt to offload their positions instead of accumulating more of the asset. Additionally, the token's negative weighted sentiment further confirms this bearish outlook, with Santiment reporting consistently negative values throughout the week. This negative sentiment indicates a lack of optimism among HBAR holders regarding its future performance.
Currently, the token's weighted sentiment stands at -0.61, suggesting a predominantly bearish market sentiment characterized by more negative discussions and outlooks. This negative sentiment signals a potential extended price decline, as traders remain unenthusiastic about initiating new trades.
Analyzing HBAR's daily chart, BeInCrypto notes a downward trend following its peak at $0.40 on January 17, with the token trading at $0.21 at the time of writing, marking a 48% decrease. The persistent trading below a descending trend line indicates a sustained downtrend, with selling pressure consistently outweighing buying activity. This dynamic makes it challenging for HBAR to surpass resistance levels, heightening the risk of further price drops. Should this trend persist, the token's price may fall below the $0.20 level to reach $0.17.
However, a potential surge in demand could disrupt this pessimistic forecast. If HBAR manages to break above the descending trend line, it could potentially rally to $0.26, signaling a shift in market sentiment towards a more positive outlook.