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The price of Hedera's native token, HBAR, is under pressure, facing a potential significant downturn. This comes as a crucial metric for its decentralized finance (DeFi) ecosystem, the Total Value Locked (TVL), has plummeted to critical lows not seen since early July. Technical indicators also suggest a bearish outlook for the cryptocurrency.
Key Takeaways
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HBAR has experienced a substantial price drop, falling over 42% from its year-to-date high.
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The Total Value Locked (TVL) in the Hedera DeFi ecosystem has significantly decreased.
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Technical analysis reveals a "death cross" pattern on the daily chart, often signaling further price declines.
Hedera's DeFi Ecosystem Struggles
The total value locked within the Hedera DeFi ecosystem has seen a sharp decline, dropping to approximately $179 million. This figure represents the lowest point since July 6 and is a considerable decrease from the year-to-date high of $396 million. Major platforms on Hedera have felt the impact:
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Stader, a leading liquid staking network, has witnessed its TVL fall to $77 million.
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SaucerSwap and Bonzo Finance have experienced asset drops of 13% and 20%, respectively.
Despite Hedera's prominence in the crypto space, it has struggled to attract the same level of developer interest as major players like Aave, Uniswap, and PancakeSwap. This has allowed newer projects to gain traction on the network.
Stablecoin Supply Shows Mixed Signals
On a more positive note, Hedera's stablecoin supply has surged by 94% in the past week, reaching $170 million. This marks the highest level since August 1, indicating increased user engagement with the network's stablecoin offerings. However, this metric has historically been volatile, experiencing significant increases followed by sharp drops. For instance, a substantial jump occurred in late September, only to be followed by a steep decline shortly after.
Technical Analysis Points to Bearish Trend
Technical indicators for HBAR paint a concerning picture. The price has retreated from a July high of $0.3052 to its current trading range around $0.1780. The ongoing recovery lacks strength, as indicated by the declining True Strength Index. Furthermore, HBAR has formed a "death cross" on its daily chart, where the 50-day moving average has crossed below the 200-day exponential moving average. This pattern, combined with a forming bearish pennant, often precedes further downward price movement, with a potential drop to the psychological level of $0.15.
Sources
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