Hedera's Bullish Divergence Points to $4M Short Squeeze Potential

HBAR has pulled back recently, establishing a descending broadening wedge pattern that typically foreshadows potential bullish momentum. Trading at $0.09 with a 24-hour decline of 0.99%, the token remains below the $0.0938 resistance level. However, beneath the surface price weakness, emerging technical signals suggest upside potential may be building. The real question isn’t whether a breakout will happen—it’s whether Bitcoin allows it.

Technical Setup Strengthens on Money Flow Divergence

A bullish divergence has formed between the Money Flow Index and HBAR price action, signaling meaningful shifts in market psychology. While HBAR recently reached a lower low, the MFI simultaneously printed a higher reading—a classic bullish divergence pattern. This divergence reveals something important: selling pressure has weakened, even as prices declined. When momentum indicators improve during price weakness, it typically reflects reduced conviction among sellers. HBAR holders appear to be pulling back from aggressive distribution, creating the conditions for a potential reversal.

Historically, when bullish divergences materialize in cryptocurrency markets, reversals follow. This particular setup suggests HBAR may be stabilizing and preparing for a rebound attempt, assuming broader market conditions cooperate.

$4.34 Million in Short Liquidations Ready to Trigger

A confirmed breakout from the descending broadening wedge could spark forced short liquidations. Liquidation data reveals a concentration of short positions clustered near the $0.1012 level—a critical threshold. Coinglass liquidation maps indicate that a decisive move above $0.1012 could trigger approximately $4.34 million in cascading short liquidations.

This matters because forced buying from liquidated shorts accelerates momentum and strengthens bullish structures in volatile altcoins. With such a significant liquidation cluster sitting at that precise level, a breakout could feed on itself, creating self-reinforcing buying pressure. For traders watching HBAR, the $0.1012 level has become the make-or-break point for confirming the bullish thesis.

Bitcoin’s Shadow: Why BTC Correlation Matters Most

Despite these encouraging technical signals, one force continues to overshadow HBAR’s potential: Bitcoin. Over recent months, Hedera has developed an increasingly strong correlation with BTC, meaning HBAR frequently mirrors Bitcoin’s direction regardless of its internal technical setup. When Bitcoin advances, HBAR tends to follow. When Bitcoin retreats, HBAR struggles to hold gains.

A brief divergence emerged between June and July 2025, when Bitcoin advanced while HBAR consolidated sideways. Beyond that period, price behavior remained largely aligned. With correlation now stronger than ever, HBAR faces an uncomfortable reality: even with a bullish divergence and short squeeze potential, weakness from Bitcoin could derail the entire breakout scenario. BTC currently trades at $70.21K with a 24-hour gain of 0.42%, suggesting at least near-term strength, but investors should monitor Bitcoin’s trajectory closely.

HBAR Breakout Path and Critical Support Levels

HBAR’s path forward depends on overcoming multiple resistance layers. Immediate resistance sits at $0.0938, which continues to cap upside attempts. A confirmed breakout requires flipping $0.1005 into support, then decisively breaching $0.1071. Clearing those levels would strengthen the bullish outlook significantly and open pathways toward $0.1300, representing recovery of recent losses.

However, $0.1071 remains the primary short-term objective before any extended rally becomes sustainable. Conversely, failure to overcome $0.0938 or loss of the $0.0855 support would shift momentum bearish. A drop toward $0.0780 would confirm continued consolidation and delay the bullish divergence from playing out.

The setup is intriguing, but execution remains the challenge. HBAR holders should watch for confirmation that this bullish divergence translates into concrete price action above $0.0938.