Hedera’s native token, HBAR, has been dealing with a sharp 26% price drop this month, causing a significant disruption in its previously forming bullish pattern. This steep decline has dashed the hopes of many traders who were expecting HBAR to reach a new all-time high soon. The broader market trends, combined with bearish signals, have cast a shadow on the token’s prospects, leading to a widespread sentiment shift toward caution.

Investor Sentiment: Fluctuating Funding Rate Indicates Uncertainty

One of the primary indicators pointing to market uncertainty is HBAR’s fluctuating funding rate. Over the past few days, the funding rate has swung between positive and negative territory. This inconsistent behavior suggests that traders are uncertain about HBAR’s future trajectory, opting to ride the market’s volatility rather than commit to a long-term bullish stance.

The inconsistent funding rate highlights the lack of clear direction among investors. With many traders avoiding long positions, the token is struggling to gain bullish traction. Until more confidence is restored in HBAR’s market potential, the price action is likely to remain unpredictable, with momentum swinging from one extreme to the other.

RSI Points to Increased Bearish Sentiment

In addition to the fluctuating funding rate, the Relative Strength Index (RSI) for HBAR has dropped significantly, reaching its lowest point in three months. The RSI, a key technical indicator, has fallen below the neutral 50.0 mark, indicating that bearish sentiment is becoming more pronounced. As the RSI declines, it signals that buying interest is weakening and that there is increasing pressure from sellers.

This decline in the RSI is especially concerning for HBAR’s price prospects, as it suggests that the downward momentum could persist. Without a shift in sentiment and a recovery in the RSI, it’s likely that HBAR will continue to face downward pressure, making it challenging to reverse the recent losses.

HBAR’s Downtrend: Is a Recovery Still Possible?

Since the start of 2025, HBAR has faced a continuous downtrend, shedding over 20% of its value. This drop has extended the bearish phase that began in mid-January and has disrupted the token’s previous bullish pattern. HBAR had been expected to break out toward new highs, but instead, it has faltered and broken below key support levels.

The steep 26% decline in February has now left the token far from its previous highs, with traders now considering further downside as the more likely scenario. If the selling pressure persists, HBAR could see prices dip to as low as $0.182. Such a drop would significantly erode the gains made in late 2024 when HBAR surged by over 600%.

However, it’s not all doom and gloom for HBAR. A potential recovery is still within reach if the token can reclaim the $0.25 support level. This price point serves as a critical level for HBAR’s price stabilization. If HBAR manages to secure this support, it could signal the start of a reversal in sentiment, giving traders renewed optimism about the token’s future.

Key Resistance Levels to Watch

Despite the current struggles, there is hope for a bounce-back if HBAR can manage to break above key resistance levels. A move past the $0.33 resistance would invalidate the current bearish outlook, restoring investor confidence. This breakout could reignite the token’s bullish momentum, signaling a potential return to its all-time highs.

Until then, traders should remain cautious, as HBAR’s price action is still guided by weak market sentiment and fluctuating momentum. The coming weeks will be crucial in determining whether HBAR can regain bullish momentum or if it will continue its downward path.