Hedera’s HBAR Doubles, Then Falls 25%, as BlackRock Links Diminish

On Tuesday, Hedera’s homegrown HBAR token experienced a significant rise of more than 107%. However, this surge was followed by a drop of 25% after investors became optimistic that BlackRock was engaged in a fund tokenization initiative on the Hedera blockchain. In simpler terms, the price of Hedera’s native HBAR token went up by over 100% on Tuesday due to rumors of BlackRock’s involvement in a project on the Hedera blockchain, but then it decreased by 25%.

On Tuesday, Archax and Hedera revealed that BlackRock’s ICS U.S. Treasury money market fund had been converted into digital tokens using the Hedera blockchain. Some Hedera followers on social media subsequently expressed the belief that BlackRock deliberately selected Hedera for this tokenization process, but in fact, this was not the case.

In a reaction to accusations of deceptive advertising from Hedera, Archax CEO Graham Rodford clarified that the decision to house the fund on Hedera was indeed made by Archax.

Over the last 24 hours, the HBAR token has surged by 61%, yet its market depth remains modest with only $900,000 in bids on Binance and Upbit at prices within 2% of the current price of 14 cents. The token boasts a substantial trading volume of over $2.6 billion during this period, as indicated by CoinMarketCap.

Based on the data from CoinGlass, there’s a strong tendency among derivative exchanges for individuals with short positions to make payments to those with long positions. This pattern suggests a prevailing bearish sentiment in the market. At present, the number of open long positions relative to shorts on Binance stands at 0.85.

In simple terms, the heavy borrowing of stock shares without delivering them, combined with limited availability of these shares for sale, can lead to significant price swings. This situation may result in the prices returning to their original value or a situation where buyers are forced to buy back the borrowed shares, leading to increased demand and higher prices – known as a short squeeze. The open interest, which represents outstanding contracts for future delivery or purchase of a security, has surged by 442% to $160 million in just one day.