Hedera (HBAR) has seen a significant price correction in recent days, pushing the altcoin to a crucial support level. Despite market weaknesses, the situation offers some relief to traders who were at risk of substantial losses from short positions. However, the overall market sentiment remains bearish, and the looming technical formation of a Death Cross raises concerns for HBAR’s near-term future.

The $30 Million Short Liquidation Risk

A substantial $30 million in short positions are at risk of liquidation if HBAR’s price rises to $0.18. This would lead to massive losses for traders who have bet against the coin’s price. While the current price of HBAR hovers around $0.157, just above critical support levels, traders are given a buffer for now. As the price has not breached the lower support level at $0.154, the liquidation risk remains mitigated for the time being. This temporary stability has spared short traders from heavy losses, but the market remains volatile, and the pressure is mounting.

The Death Cross Formation

The technical landscape for HBAR indicates a potential downside risk as the coin approaches a Death Cross. A Death Cross occurs when the 50-day exponential moving average (EMA) crosses below the 200-day EMA, which typically signals a continuation of the bearish trend. Currently, the 200-day EMA is just 3% away from crossing below the 50-day EMA, suggesting that the Death Cross could be confirmed soon. Historically, such formations have preceded extended periods of decline, which could mean further downward pressure for HBAR in the coming weeks.

The Importance of Support at $0.154

Despite these bearish indicators, HBAR has managed to stay above its critical support level at $0.154. This is an important point for traders to watch. If the price holds above this support, the immediate risk of a deeper decline is minimized. However, if HBAR falls below $0.154, it could trigger a more significant price drop, with the next support level at $0.143. A breach below this level could lead HBAR to a further slide toward $0.12 or lower.

Traders and investors should closely monitor this support level. A break below it would likely confirm the bearish outlook, possibly triggering more selling pressure. On the other hand, if the price can bounce back from $0.154 and hold above it, the situation could shift. In this case, HBAR may initiate a recovery rally.

Potential for a Reversal and Liquidation Trigger

If HBAR successfully regains the $0.165 resistance level and flips it into support, there is a strong chance of a rally toward $0.177. This move would be significant, as it could push HBAR to trigger the liquidation of short positions, especially if the price continues to climb past key resistance points. If this occurs, traders who have been betting on a downward trend could face substantial losses as the market momentum flips in favor of the bulls.

The likelihood of short liquidations increases if HBAR sustains upward movement past the critical resistance zones. As the price approaches the $0.18 mark, these short positions would be in jeopardy of getting liquidated, leading to a rapid price surge. Therefore, traders must be cautious and prepared for potential volatility in either direction.

Conclusion

HBAR is at a pivotal moment, with both bearish and bullish scenarios playing out in the market. The risk of $30 million in short liquidations looms large, but support near $0.157 has provided some relief. If HBAR manages to hold its ground and reclaim key resistance levels, it could ignite a rally and trigger short squeezes. However, the looming Death Cross remains a bearish signal, and traders should be aware of the risks of further downside if the support levels fail to hold. As always, market conditions remain fluid, and traders must stay vigilant in their strategies to navigate the current volatility.