Hedera’s native token, HBAR, has slipped into a bear market after tumbling 30% from its year-to-date highs. But while the pullback looks steep, technical patterns suggest the decline could simply be part of a larger setup for the next leg higher.
HBAR enters the second Elliott Wave phase
On Saturday, HBAR was trading at $0.2147, with trading volume at $193 million and futures open interest at $357 million. The drop follows a strong rally earlier this year, when HBAR surged from $0.1265 in late June to $0.3047 in late July.
Analysts say this rally marked the first phase of the Elliott Wave cycle. The current pullback represents the second wave, typically a retracement of 50%–61.8% of the initial surge. If the pattern holds, the third wave usually the strongest could carry HBAR as high as $0.40, about 85% above current levels.
Bullish flag and technical strength
Beyond Elliott Waves, Hedera’s chart is showing other constructive signs:
- Bullish flag pattern: HBAR has formed a classic flag structure a sharp upward move followed by a downward-sloping channel. Historically, this pattern often precedes a strong breakout to the upside.
- Above the 100-day EMA: Despite the recent correction, HBAR remains above its 100-day Exponential Moving Average, signaling that bulls still hold the long-term advantage.
Stablecoin growth supports Hedera
One fundamental tailwind for Hedera is the steady growth of stablecoin activity on its network. According to DeFi Llama, USDC supply on Hedera has risen by $45 million in the past week, pushing total supply above $115 million.
Stablecoins are critical to the success of layer-1 and layer-2 ecosystems, as shown by Tron’s rise into one of the industry’s largest and most profitable networks. Hedera’s expanding stablecoin base could offer similar benefits over time.
ETF approval could be another catalyst
Another potential driver for HBAR is regulatory. The SEC is reviewing multiple ETF applications, and the approval of an HBAR-linked ETF could unlock new demand from U.S. investors. ETF launches have historically acted as bullish catalysts for other crypto assets, and HBAR could follow a similar path.
Bottom line
HBAR’s 30% correction has pushed the token into bear-market territory, but the charts tell a different story. With Elliott Wave patterns pointing to a possible third-wave rally, a bullish flag setup, and rising stablecoin adoption, Hedera may be laying the groundwork for its next breakout potentially toward $0.40.
