Hedera (HBAR) has experienced a consistent decline in value over the last month, with a near 10% drop in its price. Despite this downward trend, the demand for altcoin futures remains strong, as investors continue to seek long positions, reflecting a bullish sentiment in the market.
Why Are HBAR Futures Gaining Popularity?
Currently, Hedera (HBAR) is trading at $0.1031, having previously peaked at $0.12 on May 17 before falling by 16%. Despite the slump in altcoin prices, activity in the futures market has been on the rise. Open positions for HBAR futures have seen an 18% increase since June 1, now totaling $60 million. The rise in open interest signals that more market participants are opening new positions.
Open interest measures the total number of outstanding futures contracts, indicating market activity levels. Alongside the increasing open interest, the funding rate on cryptocurrency exchanges has been positive since May 3, following the last negative rate recorded. Funding rates help keep perpetual futures contracts’ prices close to the spot price, indicating a healthy market.
What Does Positive Funding Rate Mean for HBAR?
A positive funding rate for HBAR futures suggests strong demand for long positions. This means more traders are expecting a price increase rather than a decline. However, the spot market shows hesitancy among traders, reflecting uncertainty about future price directions. HBAR’s price hovering near its 20-day exponential moving average (EMA) indicates market consolidation.
The 20-day EMA helps track an asset’s average price over the past 20 days. When trading close to this indicator, it suggests a period of sideways movement without a clear bullish or bearish trend. Increased buying momentum from futures traders could push HBAR’s price up to $0.105.
Key Market Insights
• Open interest and funding rates are critical indicators of market sentiment.
• Positive funding rates suggest strong demand for long positions.
• Trading near the 20-day EMA indicates market consolidation.
• Increased futures activity may result in price gains for HBAR.
The market’s current dynamics suggest a cautious optimism among futures traders for HBAR, with potential for price increases if the bullish sentiment continues. However, spot market participants remain uncertain, awaiting clearer signals for the token‘s direction.
