Core Insights - Hedera's native token HBAR experienced a 4.5% decline following the launch of the Canary Capital spot HBAR ETF, attributed to a typical sell-the-news reaction after an 18% rally the previous week [1] - Despite the short-term price drop, technical and on-chain data suggest that this pullback may set the stage for another upward movement, indicating that the ETF's impact could be felt later as profit-taking subsides [1] Technical Analysis - On October 26, HBAR confirmed an inverse head-and-shoulders breakout, a pattern that often signals the beginning of a new upward trend, reaching a target of approximately $0.219 before retracing [2] - The breakout remains valid as long as HBAR stays above $0.161, which acts as the right shoulder base [2] Market Indicators - The Chaikin Money Flow (CMF) indicator, which tracks large investor inflows and outflows, remained above zero during the price correction, indicating that significant buyers are entering the market at lower prices, providing support [3] - However, the CMF has shown a slightly lower low, suggesting that while inflows are steady, they are slowing down, which may lead to continued short pullbacks as new participants absorb selling pressure [4] Derivatives Market Dynamics - The derivatives market reflects uncertainty regarding the ETF narrative, with a significant buildup of short positions as traders believe the initial excitement has faded [5] - A liquidation map indicates that short positions on Bybit outnumber long positions by more than 2-to-1, with approximately 20.49 million USDT in short exposure compared to 9.68 million USDT in longs [6] Potential for Short Squeeze - Short positions may begin to get liquidated around the $0.198 mark, and if HBAR surpasses this level, it could trigger a short squeeze, leading to rapid price increases as short traders are forced to buy back their positions [7] - Most short positions would be eliminated if HBAR's price breaches the $0.219 mark, further driving prices higher [7]