Helium [HNT] has started to exhibit indications of a prolonged bearish trend, with a 6% decline in just 24 hours as market pressure begins to impact its value.
Currently, at $6.52, HNT is at its lowest price of the month. The token is experiencing a corrective phase after reaching a multi-month peak above $8 earlier in the month.
The recent surge in HNT’s value coincided with the expansion of the decentralized physical infrastructure network (DePIN) sector, which now boasts a market capitalization exceeding $17 billion as per Coingecko.
Is HNT’s Value Going to Fall Below $6?
Investors who entered the Helium rally are beginning to cash out, and if this trend persists, HNT could see further devaluation.
An analysis of the one-day chart reveals consecutive descending patterns, with HNT undergoing corrections following brief spikes. This bearish trend suggests that each time the value has attempted to rise, traders have intervened by taking profits.
The continual selling activity is also reflected in the movements of the Relative Strength Index (RSI), which has shown a pattern of lower lows. With the RSI line dropping below the signal line, indicating a strong bearish momentum.
Currently at 41, the RSI for HNT has not yet reached oversold levels. Nevertheless, following the loss of support at the 0.618 Fibonacci level ($6.70), there is a risk of the price falling below $6. Historically, this level has served as a robust support and failing to hold could lead to a decline towards $5.47.
Additionally, the Awesome Oscillator (AO) reinforces the pessimistic outlook. The AO has now fallen below the zero line for the first time since mid-July, suggesting that sellers are gaining momentum and that HNT could potentially continue its downward trajectory.
Bearish Signals from On-chain Data
Activity on the Helium network is also sending out bearish signals. Data from Artemis highlights a decrease in daily active addresses, dropping to 15,700 which is the lowest figure for the month.
Simultaneously, there has been a rise in daily volumes. On September 17th, this metric soared by $5 million to $17 million.
The surge in trading volumes indicates heightened short-term trading activity. However, the absence of a price increase alongside these increased volumes supports the notion of significant selling pressure, which in turn dampens the long-term price perspective.
Coinglass data indicates that the long/short ratio has plummeted to a historic low of 0.74. This suggests that the majority of traders are anticipating a further decline in price and have taken short positions on HNT.