Hedera has managed a short-term bounce after hitting a local low on December 19. Since then, the HBAR price has been up about 11% at press time. But that move alone does not change the broader picture. HBAR is still down nearly 50% over the past three months and remains weak over the last seven days.

The problem is not price alone. The bigger concern is capital behavior. While the price bounced, the data underneath shows stress building. Unless one unlikely ally steps in, this move risks turning into a bull trap.

Capital Flow Is Weakening as Breakdown Risk Builds

The first warning comes from capital flow.

The Chaikin Money Flow, or CMF, tracks whether big wallet money is entering or leaving an asset using price and volume. When CMF trends lower, it shows capital is slowly exiting, even if the price holds up.

On the daily chart, HBAR’s CMF is moving lower and pressing against a descending trendline that has guided capital outflows for weeks. This trendline connects lower lows in CMF, not price, which makes it more dangerous. It signals that large players are reducing exposure over time.

Capital Flow Weakens: TradingView

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If CMF breaks below this trendline, it would confirm a shift from weak inflows to active outflows. That would align with the broader structure, where the HBAR price is still trading inside a descending channel. In that scenario, the recent 11% bounce would likely fail to continue and sustain itself.

Shorts and Bitcoin Are the Only Potential Lifeline

There is, however, one possible counterforce.

Derivatives data show a heavy short bias. On Bitget, cumulative short liquidation leverage stands near $9.9 million, compared to roughly $6 million in long liquidations. That means there are about 50% more shorts than longs positioned around current levels.

Short Squeeze Setup: Coinglass

This matters only if the price gets help from elsewhere.

That help could come from Bitcoin. Over the past seven days, HBAR’s correlation with Bitcoin sits near 0.85. Correlation measures how closely two assets move together, with 1 meaning they move almost the same way.

HBAR-BTC Correlation: DeFillama

If Bitcoin pushes higher, the HBAR price could be dragged up with it. That move could force shorts to cover, creating a short squeeze rather than organic demand. Without Bitcoin strength, the short imbalance alone is not enough.

HBAR Price Levels To Watch

HBAR price now sits near the lower trendline of the descending channel.

If HBAR loses the $0.10 area, the structure breaks down further, and the existing long liquidations could accelerate. That would confirm the CMF signal and likely extend the downtrend.

For upside survival, HBAR needs Bitcoin support and a push toward $0.13. That level aligns with the upper portion of the recent range and could trigger a wave of short liquidations active over the next 30 days.

HBAR Price Analysis: TradingView

Until then, the risk remains skewed lower.

Hedera’s 11% bounce looks more like a dead cat bounce. A dead cat bounce refers to a short-lived rally that fails within a broader downtrend.

Capital flow is weakening, structure remains bearish, and only a Bitcoin-led short squeeze can prevent a deeper breakdown. Without that trigger, the trend stays under pressure.