Key Insights:
- HBAR price has plunged over 42% from its 2023 high, forming a death cross pattern signaling further declines.
- Hedera’s DeFi ecosystem suffers with a sharp drop in TVL, now at its lowest since July 2023.
- Hedera’s stablecoin supply surged by 94%, yet fluctuations add uncertainty to its market outlook.
Hedera’s HBAR token is facing significant challenges as it remains deep in a bear market. The token has plunged over 42% from its year-to-date high, with the price hovering at $0.1767. This marks a worrying trend, as the digital asset continues to struggle despite a modest recovery earlier this year, which saw a 77% jump from its lowest point.
Recently, HBAR formed a death cross on its daily chart. This technical pattern occurs when the 50-day moving average crosses below the 200-day exponential moving average, often signaling further price declines. Adding to the bearish sentiment, the True Strength Index (TSI) is showing continued downward momentum, further reinforcing concerns of a prolonged downtrend. Analysts warn that the token could be headed for a potential drop to the psychological support level of $0.15.
Decline in Hedera’s DeFi Ecosystem
The struggles within Hedera’s decentralized finance (DeFi) ecosystem are also contributing to the overall bearish sentiment surrounding HBAR. The total value locked (TVL) in Hedera’s DeFi projects has seen a sharp decline, dropping to $179 million. This marks a stark contrast to the peak TVL of $396 million seen earlier this year. Stader, the leading liquid staking network on Hedera, has experienced a major setback, with its TVL falling to just $77 million. Additionally, other platforms such as SaucerSwap and Bonzo Finance have seen reductions in their TVL by 13% and 20%, respectively.
Despite the downturn in the DeFi sector, Hedera’s stablecoin supply has shown some positive signs. Over the past week, it surged by 94%, reaching $170 million, the highest level since August. However, the stablecoin supply is known to be highly volatile, with significant fluctuations. For instance, the stablecoin supply rose from $69 million to $164 million in late September, only to drop back to $69 million shortly after. This inconsistency adds an element of uncertainty to the overall market outlook.
Competitive Landscape Challenges Hedera
While Hedera continues to maintain its position in the crypto industry, it faces growing competition from newer projects. Hedera has struggled to attract major decentralized finance developers such as Aave, Uniswap, and PancakeSwap, resulting in a shift of attention to emerging projects like Jupiter Lend, Unichain, and Plasma. This has further complicated Hedera’s efforts to establish itself as a leading player in the DeFi space.
