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Hedera Hashgraph (HBAR) has seen a significant price decline, with its value dropping to $0.1450, marking the lowest point since April 9. This represents a steep 35% decrease from its highest level in May, raising concerns about further downside potential. The recent formation of a “death cross” pattern on the daily chart signals continued bearish momentum in the near term.

Hedera’s Price Plunge Amid Ecosystem Development

The sharp drop in Hedera’s price comes despite notable developments within its ecosystem. Recently, an Australian company, AUDC, announced the launch of AUDD, the first Australian dollar stablecoin on the Hedera network. This initiative also marked the first commercial implementation of Hedera Studio, showcasing the network’s ability to support real-world applications.

AUDD offers several advantages, including instant settlement and ultra-low transaction costs of approximately $0.001. This development could potentially open the door for more stablecoin launches on the Hedera blockchain in the coming months. However, despite this milestone, market sentiment remains bearish due to broader concerns about the network’s stablecoin supply.

Declining Stablecoin Supply on Hedera

One major factor contributing to Hedera’s struggles is the sharp decline in its stablecoin supply. According to recent data, the total stablecoin supply on Hedera has dropped to just $40 million, which represents an 82% decline from last month’s peak of $216 million. This significant drop highlights a potential liquidity issue within the network.

When compared to other blockchain networks, Hedera’s stablecoin footprint appears to be lagging. For instance, Sonic, a newer blockchain that relaunched in January, currently holds over $380 million in stablecoins, while Unichain boasts a similar figure of $383 million. This disparity underscores Hedera’s challenges in maintaining competitiveness in the stablecoin market.

Futures Market Weakness Adds Pressure

Further compounding the bearish outlook, data from the futures market indicates a decline in investor interest. Hedera’s futures open interest has fallen to $217 million, down from a year-to-date high of $308 million. This trend suggests reduced speculative activity and waning confidence among traders.

HBAR Price Technical Analysis

The technical analysis for HBAR paints a grim picture. On May 30, the daily chart revealed the formation of a “death cross” pattern, where the 50-day and 200-day Exponential Moving Averages (EMAs) crossed. This pattern is often viewed as a strong bearish signal.

Additionally, HBAR has fallen below the upper boundary of its descending channel. Key technical indicators, including the Relative Strength Index (RSI) and the MACD, are also trending downward, further supporting the bearish outlook. These signals suggest that selling pressure is intensifying, with the next potential support level at $0.1200.

On the flip side, if HBAR manages to break above the resistance level at $0.1855, it could invalidate the current bearish sentiment. However, such a move would require a significant shift in market dynamics, which seems unlikely in the short term given the prevailing trends.

Key Takeaways for Investors

For investors interested in Hedera Hashgraph, it’s important to closely monitor both technical and fundamental indicators. Here are a few tips to consider:

  • Track stablecoin supply metrics on the network to gauge liquidity and adoption trends.
  • Analyze key resistance and support levels, such as $0.1855 and $0.1200, for potential trading opportunities.
  • Pay attention to broader market movements and sentiment, as they heavily influence altcoin performance.

While Hedera continues to innovate within its ecosystem, the current technical and market conditions suggest caution for short-term traders. Long-term investors may want to wait for clearer signs of recovery before making substantial commitments.

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