HBAR Struggles as Open Interest Hits Annual Low

Hedera’s HBAR token has experienced a significant downturn, trading at $0.21, reflecting a 17% loss in value over the past week.

The current lack of demand is evident in the token's open interest, which has descended to its lowest point this year. This trend points to a decrease in leveraged positions that may exacerbate further price declines.

HBAR’s Open Interest Declines—What Lies Ahead?

Open interest refers to the total number of unresolved derivative contracts such as futures and options. Since January 9, HBAR's open interest has progressively dwindled, plunging 8% this month alone to a current level of $149 million, marking the lowest point of the year.

When both price and open interest decrease, it signals diminishing market engagement and a decline in trader confidence. This movement indicates that traders are closing existing HBAR positions without opening new ones, painting a bearish outlook for the token in the near future unless fresh buying momentum emerges.

Moreover, on the HBAR/USD daily chart, the token remains below the dots of its Parabolic Stop and Reverse (SAR) indicator. This indicator helps assess potential trend reversals and directions, and currently suggests that HBAR is entrenched in a downtrend.

HBAR Enters Bearish Channel Again

Analyzing the daily chart further reveals that HBAR has re-entered a descending parallel channel, a pattern that contained its price movement between January 16 and March 1. Last week, heightened volatility offered a brief escape from this bearish trend. However, as demand has waned, HBAR has slipped back into the bearish trajectory, indicating renewed downward pressure.

If this negative trend persists, HBAR could potentially decrease to as low as $0.16. On the contrary, a resurgence in demand could see the price rise to around $0.24.