Helium's 28% Surge: Can It Sustain Bullish Momentum?

Helium, the cryptocurrency associated with the decentralized wireless network, has gained 28% over the past week. However, the extent of its further rally will depend on several factors, including its ability to close above a crucial resistance level and maintain a bullish market structure.

To flip the daily market structure bullishly, Helium (HNT) needed to close a daily session above $4.24. The recent bounce to $4.18 could be followed by a range formation above $3.3, as the market consolidates after a significant price drop.

Helium had fallen 68.5% from its December resistance of $9.54 to retest the psychological $3 support last week. This substantial price drop, amounting to a 68.5% decline in just over two months, was accompanied by a persistent downtrend since December. The $3.3 zone emerged as the next bearish price target, as Helium was yet to break the downtrend despite a 28% bounce.

The market structure of HNT on the daily chart remained bearish, with the recent lower high at $4.24 serving as the level to beat to shift the structure bullishly. Over the past two weeks, the bearish momentum has begun to weaken, with a bullish divergence occurring in the first week of February. This divergence, where the price made lower lows but the RSI made higher lows, was followed by a 28.5% gain in under a week.

However, the bounce was not borne on high buying volume, as indicated by the A/D indicator. This volume indicator remained on its downtrend since mid-December, although it saw a bounce over the past ten days. The 1-week liquidation heatmap noted a large liquidity cluster around $3.6, which was tested on the 10th of February. Prices quickly jumped to $4.19, likely carried higher by a cascade of short liquidations.

Since then, volatility has fallen, and HNT has consolidated under the $4 level. The magnetic zone at $3.3 could beckon the token prices to it over the coming days. Traders should be prepared for a range formation between $3.3 and $4.2-$4.5, with the $3.6 zone