Hedera (HBAR) has encountered a rough start to 2025, with its price facing a significant downturn. After reaching a four-year high of $0.41 in mid-January, HBAR has dropped by 39%, and the token is now dangerously close to breaching the $0.20 mark. The overwhelming dominance of short sellers in the futures market suggests that bearish sentiment is firmly in control, and the outlook for HBAR remains uncertain.

Dominance of Short Sellers in the Futures Market

One of the most telling indicators of the current bearish outlook is HBAR’s long/short ratio. At the time of writing, this ratio stands at 0.98, a level below 1. The long/short ratio compares the number of traders betting on the price rising (long positions) to those expecting a price decline (short positions). When the ratio is below 1, as in the case of HBAR, it signals that more traders are positioning themselves for a price drop. This shift suggests that market participants expect further declines, and the sentiment is skewing increasingly bearish.

This market dynamic is being driven by short sellers, who typically benefit from falling prices. Their dominance indicates a lack of confidence in the asset’s ability to recover anytime soon, and traders are largely hedging their bets on further downside. In such an environment, HBAR’s price faces significant resistance in attempting to climb higher.

Technical Indicators Highlight Continued Downward Pressure

In addition to the negative market sentiment reflected in the long/short ratio, several technical indicators point to continued downside risk for HBAR. The most notable of these is the Ichimoku Cloud, which tracks an asset’s market momentum and helps identify areas of support or resistance. Currently, HBAR is trading well below the Ichimoku Cloud, which typically signals a downtrend. Assets below the cloud face strong resistance if they attempt to rally, and unless significant buying pressure emerges, the token may continue to struggle.

Furthermore, HBAR’s Moving Average Convergence Divergence (MACD) indicator, another crucial tool for gauging momentum, is currently in a bearish setup. The MACD line, which tracks the difference between two moving averages, has dipped below the signal line and zero level. This alignment signals that selling pressure is outweighing buying interest. A setup like this often precedes further downward movement, suggesting that HBAR’s price could face additional losses in the near term.

Potential for Further Decline Below $0.20

Should the bearish trend continue, HBAR’s price is at risk of breaking below the psychological $0.20 level. If the market remains in a selling frenzy, it could send the token down to $0.14, which was last seen in November 2024. At this point, the continued dominance of short sellers could exacerbate the pressure on the price.

On the other hand, any reversal in sentiment could potentially shift HBAR’s trajectory. If demand for the asset picks up, buyers could push the price back above the $0.20 mark and possibly aim for the $0.32 resistance level. However, for this to happen, a significant shift in market conditions and increased buying volume would be needed, which is unlikely in the current bearish environment.

Conclusion: Bearish Market Outlook for HBAR

HBAR’s price remains on a downward path as the futures market is dominated by short sellers. The long/short ratio below 1, combined with bearish technical indicators like the Ichimoku Cloud and MACD, suggests that the altcoin is unlikely to experience a significant recovery in the short term. If selling pressure continues, HBAR could slip below the critical $0.20 level, with the potential to reach as low as $0.14. While a bullish reversal is always a possibility, the current sentiment and technical outlook suggest that further downside is more probable in the near future.