Hedera’s digital token HBAR recently experienced a significant increase in Open Interest, marking its highest surge since May. Interestingly, the rise in Open Interest appears to have been primarily fueled by short sellers, as reflected in the price movement of the cryptocurrency.
On 13 November, HBAR Futures Open Interest spiked to 61.11 million following a steady uptrend starting from 5 November. This surge represented the peak Open Interest level reached by the cryptocurrency since 21 May. Notably, Binance played a leading role in driving the increase in Open Interest, accounting for nearly $20 million.
An analysis of HBAR’s price action indicated that the buildup in Open Interest initially leaned towards bullish sentiment. However, the trend shifted along the way, with the cryptocurrency turning bearish by the time Open Interest reached its peak.
Was the HBAR rally a failed attempt?
The month began on a positive note for HBAR, mirroring the upward movement seen in other major cryptocurrencies. It surged by 83.73% between 5 November and 12 November, reaching a peak of $0.077. However, demand quickly waned, evident from a significant pullback that resembled a bull trap.
HBAR retraced by up to 26% from its peak on Tuesday to its lowest point on Wednesday. This retracement was notable for holding within a short-term resistance range, suggesting that the cryptocurrency was not yet prepared for a substantial bullish recovery.
It’s important to note that HBAR was overbought at the time of the pullback, pointing to a scenario where heightened bullish expectations for a breakout led to a trap for bulls.
According to liquidation data, an initial short squeeze resulted in approximately $539,000 worth of shorts being liquidated on 12 November. However, the subsequent pullback led to over $886,000 worth of long positions being liquidated.
The liquidations on 12 November marked the highest in the past half-year for HBAR. The trend continued into 13 November, with over $620,000 worth of long positions being liquidated.
So, does HBAR still hold potential for an upward move? Despite the recent liquidations and potential buyer caution, the cryptocurrency remains attractive due to a substantial discount it currently offers.
As of the latest update, HBAR was trading at a 66% discount from its 2024 peak price. It had a strong bullish phase in the first half of the year, culminating in a peak in April. Overall, the performance reaffirms ongoing investor interest in the cryptocurrency.