Hedera’s native token, HBAR, has recently seen significant market movements, with its price dropping after it failed to break through the crucial $0.40 resistance level. The token retraced to $0.25, signaling potential uncertainty among traders. This correction has left the market in a bearish short-term trend, but the broader outlook for HBAR remains highly bullish. To regain upward momentum and push through the current resistance, HBAR must navigate growing hesitation among market participants.

In recent market activity, there has been a sharp decrease in the futures market, with traders pulling out a large amount of capital. The open interest, which stood at $367 million three days ago, has now fallen to $216 million. This $150 million drop is indicative of a shift in sentiment as traders liquidate leveraged positions and step away from the market due to uncertainty. This contraction in open interest suggests a bearish outlook and a lack of confidence in the near-term recovery of HBAR’s price.

This reduction in open interest reflects the market’s hesitation. Traders are reducing their exposure to leveraged positions, signaling caution. With less capital being invested, it’s clear that there’s a decrease in confidence regarding a short-term reversal of HBAR’s fortunes. If there isn’t a resurgence of interest or momentum, HBAR’s price may continue to languish in the range it currently occupies, especially if bearish sentiment persists.

From a technical standpoint, HBAR’s price is also being affected by a decline in the Relative Strength Index (RSI), which has now fallen to a three-month low. The RSI is an important indicator that reflects the strength of a price trend. Currently, the RSI is below the neutral 50.0 level, showing increasing downward pressure from sellers. This suggests that sellers are taking control of the market and making it harder for buyers to regain strength. As a result, this bearish pressure is likely to suppress any immediate breakout attempts, with the possibility that HBAR could remain range-bound for an extended period.

Despite these bearish signals, there is a glimmer of hope for HBAR holders. The altcoin is forming a bull flag pattern, which historically has been a precursor to significant rallies. If this pattern continues to develop as expected, HBAR could potentially see a massive 684% surge, with the target price moving toward $2.83. However, for this bullish scenario to play out, HBAR needs to decisively break through the $0.40 resistance level. Without this crucial move, the price will likely continue to consolidate within its current range.

In the near term, the probability of an immediate breakout remains low. However, if HBAR manages to break above $0.40, it would trigger a rally toward $0.47, confirming the bull flag pattern and allowing for further upward momentum. Conversely, if the price fails to breach the $0.40 resistance level, the price is likely to remain stuck between the $0.25 and $0.40 range. In this case, a failure to hold support at $0.25 could trigger a further decline toward $0.18, invalidating the bullish outlook.

In conclusion, HBAR is at a critical juncture. The token’s price has faced significant pressure, and the drop in futures market open interest reflects a growing bearish sentiment. The decline in RSI further supports this outlook. However, the formation of a bull flag pattern suggests that a breakout could occur if HBAR can breach the $0.40 resistance. Until that happens, the altcoin is likely to remain within the current price range, with the risk of further downside if support levels fail to hold.