- Hedera traded in a range and faces a tough challenge at $0.32
- Despite the 20% price rebound from local lows, the CMF did not see significant capital inflows in the fourth half of the fourth quarter
Hedera [HBAR] formed an inverse head and shoulders pattern in the 4 hour time frame. A bullish breakout and move to $0.42 could be expected, but this did not materialize. Instead, the resistance at $0.32 proved to be a challenge too big for the bulls to overcome.
Range building challenges – HBAR bulls move beyond the mid-range
Source: HBAR/USDT on TradingView
Over the past month, Hedera traded within a certain range. The extremes of the range were at $0.255 and $0.339, with the middle level at $0.297. Trading volume has been low over the past three weeks, compared to the November rally that pushed the HBAR past the $0.25 level.
The daily RSI remained above neutral 50 despite the range formation – a sign that bullish momentum prevails. And yet this momentum is likely to be short-lived. Until traders witness a breakout supported by high volume, it would be better to treat the range as such and take swing trading positions accordingly.
Source: HBAR/USDT on TradingView
The 4-hour chart illustrated the challenges ahead more clearly. Below the high resistance at $0.344, the $0.32-$0.324 area offered resistance. It was the area where HBAR bulls were rejected and price was forced to retest range lows before recovering in recent days.
Despite rising almost 20% from the low, the CMF did not see significant capital inflows. In fact, the MACD has been hovering around neutral zero in recent weeks but formed a bullish crossover indicating upward momentum. Furthermore, the DMI suggested that a strong uptrend was starting on the 4-hour chart.
The liquidation heatmap highlighted the potential for a near-term bearish reversal from $0.337. The build-up of liquidity around the $0.26 zone over the past two weeks was wiped out on Monday, before a quick bullish reversal.
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The $0.33-$0.337 liquidity cluster is the next magnetic zone and short-term price target for Hedera. A move into this region would likely be followed by some consolidation and a retracement due to the lack of buying pressure to force the price higher.
Disclaimer: The information presented does not constitute financial advice, investment advice, trading advice or any other form of advice and is solely the opinion of the writer