Within the last 24 hours, Hedera [HBAR] has surged by over 30%, outperforming the top 30 largest cryptocurrencies in terms of market capitalization.
Currently, the altcoin is trading at a five-month peak of $0.118, with a market cap of $4.22 billion.
Is HBAR Crypto Set to Maintain Its Upward Trajectory?
The recent increase in HBAR’s value can be attributed to increased buying activity, as evidenced by the green volume bars on the charts over the past five days.
Simultaneously, the Relative Strength Index (RSI) has climbed to 88, signaling overbought conditions for HBAR. Typically, this suggests a potential short-term correction.
Despite this, some traders might opt to hold their positions rather than selling, given that other technical indicators point towards a strengthening bullish momentum.
The Directional Movement Index (DMI) confirms a robust upward trend, with the positive DI surpassing the negative DI, indicating a widening gap between the two and a strong bullish momentum.
Furthermore, the Average Directional Index (ADX) trending upwards suggests a positive market trend at the moment, with a value of 42 indicating a strengthening uptrend.
In the event that the bullish momentum persists, HBAR is anticipated to rally towards the resistance level at $0.13, corresponding to the 1.618 Fibonacci level. Historically, breaching this resistance has led to further surges in HBAR’s price, reaching $0.18 in the past.
Consequently, if buyers continue to accumulate HBAR, a similar rally could ensue.
Conversely, it is crucial for traders to monitor the $0.0546 support level, as a failure to hold this could trigger a reversal in the current trend.
Increase in Speculative Activity
The derivatives market has witnessed a surge in speculative trading around HBAR, with trading volumes reaching $1.37 billion at the latest count, marking a 104% increase in just 24 hours.
Open Interest has also experienced a significant increase to $118 million, the highest level observed since late April, indicating an influx of new positions being opened by traders.
When Open Interest rises alongside the price, it signals a bullish sentiment and strong belief in the uptrend. Positive Funding Rates affirm a preference for long positions in the market.
While this optimistic outlook could potentially propel HBAR’s gains further, a spike in Open Interest also implies heightened leverage, which may result in increased price volatility.
Surge in DeFi Activity as a Driving Force for HBAR’s Rally
The Hedera blockchain has witnessed a notable surge in decentralized finance (DeFi) activity, which could serve as a catalyst for the ongoing rally of HBAR.
Data from DeFiLlama points to an 82% increase in Hedera’s DeFi Total Value Locked (TVL) within a week, now standing at $93 million as of the latest update.
A similar uptrend is evident in DeFi trading volumes, which have experienced substantial growth over the past week.
Historically, an increase in DeFi activity has been associated with price appreciation. Hence, if the TVL continues to rise, it is likely to provide further support to the bullish momentum of HBAR, fostering additional gains.