Helium (HNT) Drops 24% After Rally, Faces Key Support Levels
1min read Helium (HNT) recently experienced a significant 24% pullback following an explosive surge, raising questions about its future trajectory. The altcoin had shown signs of recovery after a prolonged downtrend since late January, with a market structure break to the upside on April 12. This break suggested the end of a substantial downtrend and the potential start of an uptrend, as buyers appeared to regain strength. HNT hit a recent all-time high of $4.5 during this rally, only to pull back to approximately $3.4, marking a 24% decline.
Despite this pullback, the market structure for HNT remains bullish, indicating potential for further upward movement in the near term. The current trading price hovers around the 50% Fibonacci retracement level, a pivotal point that could influence future price action. If bullish momentum fades or broader market conditions worsen, HNT might test its next significant support levels at $3.00 and $2.25. Two primary factors could drive such a correction: Bitcoin's volatility and weak buying pressure. Bitcoin is struggling to confirm a local bottom, and a potential decline below a certain threshold could spark market-wide sell-offs, negatively impacting altcoins like HNT. Additionally, the On-Balance Volume (OBV), a key metric for tracking buyer activity, failed to break above its February high, suggesting that the bullish drive may lack the necessary momentum to push prices significantly higher.
On the 4-hour time frame, HNT faces resistance at approximately $3.7, a level that had previously acted as a bearish breaker block. Price action has been capped in this zone over the past few days, and the Relative Strength Index (RSI) indicates weakening momentum, suggesting that bulls are starting to lose strength. The on-balance volume has also failed to set a new high in this time frame, supporting the idea that bullish buying volume is ebbing. A continuation in OBV growth could support a breakout above $3.7 and reinitiate a bullish rally.
Currently, the short-term market structure on the 4-hour chart is bearish, warranting caution. If Bitcoin drops below a certain threshold, it could reinforce bearish psychology, and HNT may drift toward the $2.75 – $3.00 zone. Conversely, if HNT bounces above $3.7 with solid OBV confirmation, it could set up a bullish scenario. In this case, traders would look for long opportunities, targeting a move back toward the $4.5 region or higher.
In conclusion, Helium (HNT) is at a critical juncture. While the larger trend has turned bullish, short-term pressures and weak buyer interest pose risks to further gains. Traders should monitor Bitcoin's price movements and Helium's OBV closely for cues. A confirmed OBV uptrend and Bitcoin stability are key factors that could fuel HNT's next rally.
