Hedera Hashgraph price has retreated sharply in recent days as the outlook for the crypto industry has worsened.

Hedera Hashgraph (HBAR) fell to a low of $0.2483, a drop that mirrored other popular cryptocurrencies like Bitcoin (BTC) and Ethereum (ETH). Most cryptocurrencies have dropped, bringing the total market capitalization of all coins to $3.24 trillion.

Hedera’s retreat coincides with a decline in the total value of assets locked in its decentralized finance ecosystem. According to DeFi Llama, the TVL has dropped to 675 million HBAR, down from the year-to-date high of 1.35 billion tokens.

In U.S. dollar terms, the TVL has fallen from $209 million on Dec. 3 to $165 million. This decline suggests that investors are pulling out funds from Hedera’s DeFi platforms like SaucerSwap, Bonzo Finance, and HbarSuite.

To be fair, Hedera is not the only blockchain network experiencing a decline in DeFi assets. Other popular chains like Cardano, Ethereum, and Solana have also seen capital flight in recent days. Historically, investors tend to exit these platforms during periods of broader cryptocurrency market weakness.

Despite the current downturn, Hedera Hashgraph has some positive fundamentals that could drive its price higher in the long term. The network boasts partnerships with major global companies like IBM and Google, both of which are members of its governance council.

Hedera is also positioning itself as a key player in the Real World Asset Real World Asset tokenization industry. Tokenization refers to converting illiquid assets into liquid ones that can be easily moved and traded. Hedera’s fast transaction speeds and low costs make it an attractive option for developers in this space.

Another potential catalyst for HBAR is the possibility of the Securities and Exchange Commission approving a spot HBAR ETF in 2025. According to a senior Bloomberg analyst, the SEC may approve the ETF since it does not classify HBAR as a security.

Hedera Hashgraph price forms a bullish pattern

The daily chart shows that the HBAR price is forming a bullish chart pattern. Specifically, it is developing a falling wedge pattern, which typically forms as an asset consolidates between two falling trendlines. A bullish breakout often occurs when the two lines converge.

Additionally, Hedera is forming a bullish pennant pattern, characterized by a long upward trendline followed by consolidation. This pattern also often leads to a strong bullish breakout over time. HBAR remains above the 50-day moving average and the major support and resistance pivot point of the Murrey Math Lines at $0.1953.

Therefore, a contrarian case can be made for Hedera’s price. If the bullish patterns hold, HBAR could rebound and retest the year-to-date high of $0.3940, representing a potential gain of about 66% from the current level. However, the bullish outlook would be invalidated if the coin drops below the major S&R level at $0.20.