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HBAR price bounced back from its lowest level during the weekend. Hedera jumped to $0.2470, up 12% from its lowest point on Saturday. However, these gains may be short-lived as a crucial stablecoin metric imploded and a bearish chart pattern formed.
HBAR Crypto Chart Points to a Reversal
The daily timeframe chart shows that the HBAR price is at a significant risk of a bearish breakdown despite its recent rebound. First, it has formed the highly bearish double-top pattern at $0.300 and a neckline at $0.2310, its lowest level on July 24.
A double-top pattern is one of the most common bearish reversal patterns. Its formation implies that investors or bulls are afraid or hesitant to place bids above the double-top level.
Subtracting the neckline from the double-top level gives the double-top a height of $0.07. Subtracting the height from the neckline gives a price target of $0.16, about 35% below the current level.
Oscillators also point to the formation of a bearish divergence pattern. The Percentage Price Oscillator (PPO), a unique form of the MACD, has continued to point downwards. Its histogram was below zero, while its two lines formed a bearish crossover pattern.
The Relative Strength Index (RSI) has moved from the extreme overbought level of 84.40 on July 17 to 53 today. It attempts to move below the neutral point of 50, confirming more downside.
The bearish HBAR crypto price forecast will become invalid if the price rises above the double-top point at $0.300. Such a move will imply that more buyers are willing to place bids, pushing to last year’s high of $0.4, 63% above the current level.
HBAR Crypto Stablecoin Supply Plunges
A potential catalyst for the HBAR price sell-off will be the performance of its stablecoin supply. The chart below shows that the supply of USDC on the network has crashed in the past few days.
Hedera ended last week with over $224 million in stablecoin supply, its all-time high. This was a significant achievement as the supply crossed the previous all-time high of $214 million. The supply then imploded to the current $67 million, a 70% drop.
This action is notable because it is not the first time that Hedera’s stablecoin supply has crashed within a day. For example, this supply dropped from over $212 million on May 27 to $46 million on May 29.
Stablecoin growth is an important component for any blockchain. For example, Tron has become the most profitable chain in the crypto industry by being one of the biggest players in USDT transactions.
A crash in stablecoin supply is a sign that the network’s activity is dwindling, at a notable time since Trump signed the GENIUS Act into law. The sharp decline in the supply could be a sign that one person is responsible.
More data reveals that Hedera Hashgraph’s decentralized ecosystem is deteriorating. While the total value locked (TVL) has jumped in USD terms, it has moved sideways in HBAR terms. Hedera had a TVL of 1 billion BAR tokens as of today, August 4, down from its peak of 1.4 billion last November.
Summary
HBAR’s price rebounded nearly 100% from its lowest in June this year. This rebound coincided with the broader crypto market bull run that pushed most tokens upwards.
Recently, however, the token is flashing a red alert that may trigger a bearish breakdown. It has formed a double-top pattern at $0.30, and is hovering near the neckline at $0.2315.
The network’s total value locked in the network has stalled, while the stablecoin supply has nosedived for the second time in less than three months. That is a sign that the token may continue falling in the coming days.
