December turned out to be a month of consolidation for Hedera HBAR holders. Investors have been eager to see which direction the cryptocurrency would lean. While the first week of January brought some bullish optimism for HBAR price, things may not be so clear cut.
Spot flows in particular remained mostly in favor of the bears in the last 7 days. The last 24 hours at the time of observation achieved some inflows by just over $3 million. However, the day concluded with a resurgence of outflows by over $7 million.
The negative spot flows revealed that market confidence was not yet there. This is despite the previously observed optimism that the wave of sell pressure which kicked off in December would be short-lived.
It was also contrary to recent market excitement especially in regards to the HBAR cryptocurrency. This is because its weighted funding rates remained positive in the last 7 days.
HBAR price bullish optimism leads to losses
Open interest registered a sharp bounce-back. To put things into context, HBAR had roughly $201.45 million in futures open interest as of 1 January. That figure quickly surged to $379.63 million as of 7 January.
The surge in open interest combined with negative spot flows confirmed a disparity in the market. The kind that usually leads to liquidation set-ups. Unsurprisingly, long liquidations amounted to $2.67 million in liquidations in the last 24 hours. Slightly over 4 times higher than short liquidations.
HBAR has been stuck in a consolidation since early December. Sell pressure remained limited, possibly courtesy of long term optimism. On the other hand, lack of robust upside such as the November rally signals demand exhaustion.
The price action consolidation underscores the directional uncertainty but could also highlight the potential risk of capitulation. Especially if demand fails to make a strong comeback, in which case the bears could capitalize, possibly extending the pullback from December highs.
Hedera network metrics reveal the state of activity
The declining excitement around HBAR was a reflection of its latest market stats. For example, daily on-chain volume peaked slightly above $496 million in November.
On-chain volume has since dipped considerably to a fraction of its peak performance in November. For context, daily volume hovered at $30.66 million as of 6 January.
Aside from the volume decline, the data also revealed noteworthy TVL decline. Roughly 1.06 billion HBAR was locked in mid-November. That figure has since dipped to $566.48 million as of 7 January. This means the TVL was down almost by half of its November levels.
Based on the above data, it was clear that Hedera network activity cooled off dramatically in the last few weeks. This outcome was also observed in HBAR price action which was previously in a parabolic uptrend in November.
Despite these observations, HBAR price has since held on to most of the gains achieved in December. Perhaps a sign that holders are still optimistic about their 2025 prospects.
