HBAR Price Risks Breakdown as Hedera Network Activity Plunges

Since July 17, Hedera Hashgraph’s native token, HBAR, has trended mostly sideways. Despite several attempts at an upward breakout, market volatility and growing bearish sentiment have repeatedly prevented this. 

Now, with Hedera showing signs of weakening user demand, HBAR risks extended consolidation or even deeper losses.

Falling TVL and DEX Volumes Put HBAR’s Price Stability at Risk

Over the past few days, user activity on the Hedera network has declined, marked by a drop in its total value locked (TVL). Per Artemis data, this currently sits at $129 million, down 5% since August 14.

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TVL measures the total capital deposited across a network’s decentralized finance (DeFi) protocols, making it a key gauge of investor confidence and user demand. A rising TVL reflects increasing activity and demand, as more users lock assets into lending, staking, or liquidity pools.

Conversely, a falling TVL signals declining participation, reduced liquidity, and waning confidence. Therefore, Hedera’s falling TVL suggests a dip in users engaging with its DeFi ecosystem, adding pressure to HBAR’s already stagnant price action.

Further, the fall in decentralized exchange (DEX) volumes on Hedera confirms the plummeting user activity on the network. In the past week, this has dropped by nearly 60%, according to Artemis.

A decline in DEX volume reflects weakening transaction flow, with fewer users swapping, trading, or providing liquidity across the network’s protocols. 

This reduction in trading momentum limits Hedera’s on-chain activity and highlights reduced speculative interest in its native token. It dampens short-term price recovery hopes and increases the risk of extended stagnation or a bearish breakdown if demand remains absent. 

Can HBAR Hold $0.227?

On the daily chart, readings from HBAR’s Moving Average Convergence Divergence (MACD) confirm the possibility of a bearish breakout of its current range. 

At press time, HBAR’s MACD line (blue) rests below the signal line (orange), a sign that sell-side pressure is gaining dominance. 

The MACD indicator identifies trends and momentum in its price movement. It helps traders spot potential buy or sell signals through crossovers between the MACD and signal lines.

When the MACD line rests below the signal line, it indicates declining buying pressure and growing selloffs. If this continues, it could trigger a breach of the support formed at $0.227. A break below this key support could lead to a deeper drop toward $0.196.

However, HBAR’s price could break above $0.266 if sentiment improves and buying resumes.