Hedera [HBAR] see 37% spike in a week, but potential drop to $0.14 ahead

Over the past week, Hedera [HBAR] has been making significant strides, surprising many investors with its performance. However, such rapid price increases are often followed by adjustments. Will HBAR experience a similar scenario this time?

The Remarkable Growth of Hedera

HBAR investors had reasons to rejoice last week, as data from CoinMarketCap indicated a 38% surge in the token’s price during that period.

This bullish trend continued over the last 24 hours, with the token experiencing an additional nearly 24% increase. As a result, the token’s price reached $0.205, accompanied by a market capitalization exceeding $7.8 billion.

As the value of Hedera rose, its social metrics also saw an uptick, indicating a growing interest in the token within the cryptocurrency community.

Meanwhile, prominent crypto analyst Crypto Tony highlighted that this price surge presented a favorable entry point for investors. But is this truly the case?

Potential Reasons for a Decline in HBAR’s Price

While the substantial price increase benefited investors, such occurrences are often trailed by price corrections.

Once the excitement subsides, the token could likely experience a minor pullback, offering a better opportunity for investors to initiate new positions.

This potential scenario is corroborated by the sharp drop in the token’s trading volume. According to Santiment’s data, HBAR’s volume experienced a significant decline as its price soared. Such instances typically indicate a forthcoming bearish trend reversal.

Additionally, Hedera’s Fear and Greed Index have taken a bearish turn. At present, the metric stands at 86%, indicating an “extreme greed” sentiment in the market.

Such high figures often serve as a signal to sell, which could negatively impact the asset’s price in the short term.

Furthermore, Hedera’s long/short ratio exhibited a decrease within the 4-hour timeframe.

This shift clearly indicates a higher number of short positions compared to long positions, signaling a rising bearish sentiment.

Technical indicators for Hedera also point towards possible price corrections. The token’s price has been following a sharp upward channel.

As a result, its price touched the upper boundary of the Bollinger Bands, typically leading to price adjustments.

The Relative Strength Index (RSI), a technical indicator, is hovering close to the overbought territory. An entry into this zone can elevate selling pressure, potentially driving the price downwards.

If such a scenario unfolds, investors may witness HBAR dropping towards a critical support range between $0.142 and $0.128.