Hedera price has been in a downtrend since early January as investor demand dropped due to declining network metrics and a broader crypto market fallout.

According to data from crypto.news, Hedera (HBAR) price has dropped over 30% so far this year, a decline that followed shortly after a brief initial rebound in January. The 27th largest crypto asset by market cap has fallen nearly 70% since July of last year, marking a period during which the asset has been in a pronounced downtrend.

The Hedera price has continued to slump due to growing concerns on both the macroeconomic and geopolitical fronts. These include concerns of a partial U.S. government shutdown and a more hawkish Federal Reserve policy, both of which have deterred investors away from risk markets and into traditional safe-haven assets.

Growth within the Hedera ecosystem has also slowed over the past months. According to data from DeFiLlama, the total value locked in the network has dropped to $57.2 million from the $146 million recorded in July. 

At the same time, weekly revenue generated by dApps on the network has declined by nearly 70% over the last week compared to the highs seen during mid-October.

Declining TVL and dApp revenue suggest a cooling of developer activity and user engagement within the ecosystem. This lack of utility tends to impact investor sentiment, often spiralling into a self-reinforcing cycle of price depreciation.

Demand for the U.S. spot Hedera ETF has also stalled. Besides the $1 million in inflows recorded on Feb. 6, the fund has had no flows over the past three weeks, with its cumulative inflows remaining stuck at $90 million. 

This vacuum of institutional support stands in stark contrast to other popular altcoin ETFs like SOL and XRP, which remain in demand.

Hedera price analysis

On the daily chart, the Hedera price has dropped below the $0.10 psychological support level, which had previously acted as a reliable floor for the asset. The loss of this key psychological anchor has left investors feeling cautious as it signals that the bulls are losing their grip on the market.

The altcoin had also failed to break a descending resistance trendline that has defined its price action since the downtrend began in October last year. As long as HBAR fails to break free from this persistent downward pressure, it could continue to search for a bottom.

A look at technical indicators also supports the likelihood of a bearish continuation at least in the short term. Notably, the Supertrend indicator has flashed red as it moved below the price, suggesting that the path of least resistance is currently down. 

Meanwhile, the MACD lines have also been trending downwards and remain positioned under the zero line, confirming that bearish momentum is still in play.

Based on these technical signals, the current outlook for the Hedera price seems to favor the bears, with the next key support level to watch at the Feb. 6 low of $0.073, which lies roughly 20% below the current price levels around $0.091. A drop below this mark would further confirm the bearish outlook.