In the previous week, the price of Helium (HNT) experienced a significant decline of 68.5% from its resistance level of $9.54 in December, reaching a crucial support level of $3. This sharp decrease transpired over a span of slightly more than two months.
Due to the absence of substantial buying pressure and the sustained downward trend observed since December, the $3.3 range emerged as the subsequent bearish target for the price of Helium.
Helium Struggles to Reverse the Downtrend Despite a 28% Recovery
An analysis of the daily chart for HNT revealed a bearish market structure. The recent peak at $4.24, highlighted in orange, acts as a key resistance point that must be surpassed to indicate a potential shift towards a bullish trend.
Signs of a weakening bearish momentum have appeared in the market over the past fortnight.
A bullish divergence was identified in early February, where the price continued to make lower lows while the Relative Strength Index (RSI) registered higher lows.
Subsequently, Helium experienced a price rebound from the critical support level at $3, leading to a gain of 28.5% within a week.
However, this recovery was not supported by significant buying activity based on the Accumulation/Distribution (A/D) indicator. Despite a recent uptick, this volume metric has been on a decline since mid-December.
An examination of the one-week liquidation heatmap highlighted a notable liquidity concentration around $3.6. Following a test of this level on February 10th, the price surged to $4.19 swiftly, benefiting partly from a cascade of short positions being liquidated.
As of now, the volatility has decreased, and the price of HNT has consolidated below the $4 mark. The magnetic zone around $3.3 may attract the token’s price movement in the days ahead.
Traders should anticipate a potential range formation with a lower boundary near $3.3 and an upper boundary spanning from $4.2 to $4.5. In the short run, the $3.6 range is expected to impede further downside movement.
Disclaimer: The opinions expressed in this article do not constitute financial, investment, or trading advice, and represent solely the viewpoints of the author.