Helium [HNT] Drops 24% After Bullish Break, Faces $3 Support
1min read Helium [HNT], a prominent altcoin, experienced a significant retracement of nearly 24% from its local high of $4.5, which it reached on April 12. This retracement followed a bullish market structure break, where HNT climbed past the recent lower high at $3.4, signaling an end to the downtrend that had been in place since the end of January. Despite the retracement to $3.4, HNT managed to retain its bullish structure, with the next long-term support levels identified at $3 and $2.25.
The potential for further retracement to these support levels is influenced by two primary factors. Firstly, the volatility surrounding Bitcoin [BTC] remains a significant concern. The uncertainty regarding whether BTC has formed its local bottom could lead to market-wide selling if BTC drops below $83k, negatively impacting HNT. Secondly, the lack of overwhelming buying pressure could also contribute to a move towards these support levels.
The On-Balance Volume (OBV) indicator, which tracks buying and selling pressure, tested its February highs during the bullish market structure shift but failed to climb higher. This suggests some weakness from the bulls. If the OBV can establish an uptrend in the coming days, the chances of another Helium rally might increase. On the 4-hour chart, the Relative Strength Index (RSI) indicated that momentum had slowed down over the past week. The price action showed that the bearish breaker block at $3.7 served as resistance over the past couple of days, and the OBV's struggles to make a new high were more apparent on this timeframe.
At the time of writing, HNT was trading around the 50% retracement level and could potentially bounce higher and beyond $3.7. However, this would require higher buying pressure. Traders can watch the OBV for clues of a breakout past $3.7. The structure on the 4-hour chart remained bearish, and a drop in BTC below $83k would strengthen the short-term bearish bias for Helium. In this scenario, traders might look for opportunities to sell, targeting a retracement to $2.75-$3.
