Hedera's Price Surge: A Potential January Rally Supported by Growing Stablecoin Supply

Hedera's price has recently bounced off a critical support level, bolstered by a rise in its stablecoin supply over the past two weeks. This article explores the implications of this trend and whether Hedera may be gearing up for a bullish rally in January.

Key Takeaways

Price Movement: Hedera (HBAR) currently trades at $0.125, marking a 2.6% increase in the last 24 hours and an almost 18% rise from its weekly low.
Stablecoin Growth: The network's stablecoin supply surged from $74.5 million to $121.4 million in a matter of weeks, reflecting increased liquidity.
Market Sentiment: The overall crypto market has improved, with Bitcoin breaking resistance levels and the Crypto Fear and Greed Index returning to neutral.
Technical Patterns: Hedera has formed a descending parallel channel and is close to a potential breakout, supported by favorable momentum indicators.
Investment Trends: Institutional interest in Hedera remains low, as evidenced by a drop in ETF inflows.

Hedera price breaks above crucial support as its stablecoin supply grows.

Main Content

Hedera's price has rebounded from a vital support level, supported by over two weeks of increasing stablecoin supply. This trend raises questions about whether the cryptocurrency might be setting up for a bullish rally in January.

As reported by crypto.news, Hedera (HBAR) is trading at $0.125, which is a 2.6% rise within the past day and nearly 18% higher compared to its weekly low. Analyzing the broader trend, HBAR has gained almost 21% in value over the past month.

The price increase is linked to a key fundamental factor that has strengthened recently. Data from DeFiLlama indicates that Hedera's stablecoin supply has experienced significant growth since mid-December, lifting from $74.5 million to about $121.4 million as of now.

Growing stablecoin supplies enhance liquidity on the network, which can subsequently lead to heightened investor demand for the token.

Additionally, Hedera has benefited from a general recovery in the cryptocurrency market. Bitcoin has broken through the psychological resistance of $90,000 for the first time since mid-December. Meanwhile, the Crypto Fear and Greed Index, which assesses market sentiment, has shifted back to the 'neutral' zone after weeks of displaying 'extreme fear.'

Historically, January has shown strong performance trends for both cryptocurrencies and stocks.

On a daily chart, Hedera has reclaimed the $0.123 support level, a crucial price point that has functioned as a floor during past dips. Each decline towards this level has typically been met with a successful rebound.

It's also important to note that Hedera's current price movements are occurring within a multi-month descending parallel channel, characterized by two downward-trending, parallel lines.

Hedera price has formed a descending parallel channel pattern on the daily chart.

From a technical standpoint, remaining within this channel indicates a downtrend. However, a decisive breakout from this pattern could serve as a bullish reversal signal, often stimulating upward price movement.

At the time of writing, Hedera's price is nearing the upper trendline of this pattern. A bullish breakout appears promising, particularly as momentum indicators are increasingly supportive of buyers. Notably, the MACD lines are trending upward, and the bullish histogram is expanding, while the RSI has recovered above neutral thresholds, indicating a bullish divergence.

In the short term, HBAR has also formed a double bottom, another pattern signaling potential price increases.

Hedera price has broken out of a double bottom pattern on the 4-hour chart.

Taking all these bullish signals into account, Hedera's next target could be the $0.160 level, which represents the next key resistance zone, nearly 28% higher than the current price. Sustaining a breakout above this level, driven by continued bullish momentum, could lead the price to approach its October peak of $0.228.

However, it's worth mentioning that institutional demand for Hedera is still lagging. The spot Hedera ETF witnessed inflows on only three days throughout December, totaling $3.4 million—about one-tenth of the amount seen the month prior. This decline in ETF inflows suggests that Hedera is not yet attracting as much interest from American investors compared to rival altcoin-focused ETFs like Solana and XRP, which have consistently seen daily inflows during the same time frame.