Hedera's token gained 14% over the past week, marking a recovery from recent losses, but monthly performance still shows a 9% decline. Market indicators split between optimistic retail traders and institutional signals on one side, and large holders reducing positions on the other, creating uncertainty about the cryptocurrency's near-term direction.

What to Know:

• Large wallet holders reduced their Hedera positions by roughly 1.1% of total supply since Oct. 21, representing at least $20.9 million in outflows, while smaller traders increased buying activity
• The Smart Money Index climbed above its signal line to 1.08 and the Money Flow Index surged from 35 to 69.4 over two weeks, both suggesting bullish sentiment among experienced and retail traders
• Technical analysis shows hidden bearish divergence on daily charts with support levels at $0.189, potentially sliding to $0.168 or $0.154 if selling pressure continues

Market Sentiment Splits on Recent Rally

The Smart Money Index, which tracks moves by experienced Hedera traders, has climbed steadily since Oct. 26, reaching higher highs and positioning above its signal line. This pattern typically indicates informed traders expect either a rebound or believe the worst has passed. The index holds near 1.08, maintaining what analysts describe as a cautiously bullish short-term outlook, though a drop below that level could shift sentiment quickly.

Retail traders appear even more optimistic than their institutional counterparts.

The Money Flow Index, which measures buying and selling pressure using both price and volume data, jumped from approximately 35 to 69.4 over a two-week period. This sharp increase signals fresh capital inflows and rising retail interest, a pattern that often emerges when smaller traders purchase during price dips anticipating a recovery.

Both groups maintain confidence in potential upside for Hedera's price. That optimism faces a significant counterweight from large holders who have begun reducing their positions despite the recent rally.

Large Holders Reduce Positions During Price Recovery

Accounts holding 100 million or more HBAR tokens decreased their share of total supply from 41.75% to 40.65% since Oct. 21, according to blockchain data. This decline represents roughly 1.1% of total holdings among these large wallets exiting within less than two weeks.

The movement translates to a minimum of 110 million HBAR tokens leaving whale wallets.

At current prices, this shift represents at least $20.9 million in value departing from large holder accounts during a period when smaller traders turned increasingly bullish. The divergence creates what market observers describe as a classic split between retail optimism and whale caution.

If large holders are positioning ahead of a correction, technical indicators should begin showing early warning signs. The daily chart already displays such patterns.

Technical Indicators Point to Potential Decline

Hedera has traded within a tight range between $0.219 and $0.154 since Oct. 11, reflecting indecision between buyers and sellers. Between Oct. 6 and Oct. 29, the price made a lower high while the Relative Strength Index, which tracks price momentum, made a higher high. Analysts identify this pattern as hidden bearish divergence, a setup that often signals continuation of an existing downtrend and could trigger a correction if key support levels break.

The token currently holds above $0.189, but losing that support could trigger a slide toward $0.168.

If selling continues beyond that point, the next major support sits near $0.154, with potential for further decline to $0.119 if that level fails. A move below $0.168 would confirm bearish continuation, while holding above it might allow short-term consolidation.

The odds currently lean toward a deeper pullback unless new buying volume arrives to offset ongoing whale exits. The contrast between retail enthusiasm, institutional signals, and large holder behavior suggests the market has not yet reached consensus on Hedera's near-term trajectory.

Understanding Market Indicators

The Smart Money Index attempts to track institutional and experienced trader behavior by analyzing price movements during specific trading hours. The Money Flow Index combines price and volume to measure buying and selling pressure on a scale from zero to 100, with readings above 50 generally indicating net buying pressure. Hidden bearish divergence occurs when price action forms lower highs while momentum indicators form higher highs, suggesting weakening upward momentum despite apparent price stability. These technical patterns do not guarantee specific outcomes but provide context for potential market movements.

Closing Thoughts

Hedera faces competing forces as retail traders and institutional indicators signal optimism while large holders reduce exposure. The technical setup suggests vulnerability to further declines if the $0.189 support level fails to hold. Whether the token stabilizes or continues its monthly decline depends largely on whether new capital inflows can offset the recent whale exits and whether the hidden bearish divergence pattern plays out as historical precedent suggests.