Traders face a challenging road ahead amidst volatile market conditions.
HBAR price experienced a significant increase of 15% on February 6, reaching a 20-day high of $0.78. This surge in price came shortly after the Hedera team confirmed a $250 million agreement with the Saudi Arabian Ministry of Investment. The recent partnership between Hedera and the Saudi Arabian government has had a positive impact on the price of HBAR. However, there is a concern that derivatives traders may hinder the price rally.
Since the crypto market correction in mid-January, HBAR price has been on a downward trend. Between January 11 and February 5, the native coin of the Hedera blockchain had dropped by 22%. However, the announcement of the partnership with the Saudi Arabian government on February 6 caused a shift in momentum, leading to a bullish trend.
The partnership entails an investment plan that allows companies to develop advanced technological solutions at the newly launched DeepTech Venture Studio in Riyadh. As a result of this announcement, HBAR price experienced a dramatic increase of 15%, rising from $0.69 to $0.77 within 24 hours.
Despite the rally, a crucial market metric indicates that speculative traders may undermine the recovery phase. The funding rate metric provided by Coinglass tracks the fees paid by long and short trades in the derivatives markets to maintain their contract positions. The HBAR funding rate has been declining in the negative zone, suggesting skepticism about the sustainability of the price rally. On February 7, the funding rate reached a 90-day low of -0.02%. This negative trend implies that if the bulls fail to counteract these positions and establish a stronger upward momentum, HBAR spot prices could face a significant downturn.
Based on the analysis of the market data, it is possible that the bullish impact of the Saudi Arabia partnership on HBAR price may be short-lived. The bears could target a further decrease below $0.65, considering that HBAR recently traded as low as $0.67 before the rally. However, the Bollinger band’s technical indicator suggests that the bulls could find support around the $0.67 area. If this support level fails to hold, a bearish reversal towards $0.60 could be in the cards.
On the upside, if the bulls can maintain the momentum from the Saudi partnership, they could invalidate the negative price prediction by retesting $0.80. However, there is a potential sell-wall at $0.78 that could impede the rally.
