HBAR Faces Pressure From 4B Token Unlock and Fading ETF Demand

Hedera (HBAR) is facing potential downward pressure as a massive token unlock event approaches alongside cooling investor interest in exchange-traded funds. Nearly 4 billion tokens are set to be released into circulation this quarter, raising concerns about increased selling pressure [1]. Meanwhile, technical analysis suggests the asset remains in a bearish trend, with demand for HBAR ETFs showing signs of stagnation [2].

Key takeaways

• Nearly 4 billion HBAR tokens are scheduled for release this quarter, representing an 8% increase in supply that traders fear could drive prices down [1].
• Inflows into the Canary HBAR ETF have stalled recently, with the fund recording an outflow of $1.71 million and total assets sitting around $61 million [2].
• Technical indicators, including a "death cross" pattern and a descending channel, point to a possible 30% price decline toward the $0.10 support level [2].
• Despite the bearish outlook, some analysts point to a previous 8% unlock in late 2024 that preceded a 700% price rally as a reason for cautious optimism [1].

Massive Token Supply Increase Looms

Hedera is preparing for a significant expansion of its circulating supply. Approximately 4 billion tokens, roughly 8% of the total supply, are expected to be unlocked this quarter [1]. While these tokens are intended for long-term ecosystem growth, market observers worry that early holders may sell to take profits, creating downward pressure on the price [1]. The token is currently trading in a tight range, holding just above $0.091 according to one report, though another source places it higher at $0.14 following a recent decline from August highs [1][2].

ETF Demand and Technical Signals Weaken

Institutional appetite appears to be waning just as the supply shock approaches. Data indicates that inflows into the Canary HBAR ETF have dried up, with the most recent activity being a $1.71 million outflow [2]. The fund has accumulated significantly less capital than Solana-based ETFs, bringing total net assets to approximately $61 million [2][4]. On the technical front, the chart formation is concerning; analysts have identified a "death cross," a head-and-shoulders pattern, and a descending channel, all of which suggest the bearish momentum could continue [2][4]. Open interest in HBAR futures has also plummeted to $112 million, its lowest level this year, signaling a drop in speculative demand [2].

Why it matters

The convergence of a large supply increase and fading institutional demand creates a precarious environment for HBAR holders. If the selling pressure from the unlock materializes while technical support levels fail, the price could test lower targets around $0.10 [2]. However, the market is watching closely to see if history repeats itself, as a similar unlock event in the fourth quarter of 2024 was followed by a substantial price rally of nearly 700% [1].