Helium (HNT) has been experiencing a rough period in the market recently, with a 20.11% loss over the past month. This downtrend has been accompanied by a surge in selling pressure, particularly in the derivatives market, leaving many traders wondering if the altcoin will fall below its 2024 low. Despite the bearish outlook, there are signs that some market participants are beginning to shift their positions, offering a glimmer of hope for a potential recovery. However, with a heavy reliance on buyer support at key levels, the question remains: will HNT drop further, or is there room for recovery?
Increased Selling Pressure in the Derivatives Market
One of the most noticeable trends for Helium (HNT) recently has been the surge in selling volume. In the derivatives market, selling pressure has significantly outpaced buying activity, as evidenced by the Taker Buy-Sell ratio dropping to 0.963. When this ratio dips below 1, it signals an uptick in selling pressure, with more traders opting to short the asset than to take long positions.
A lower ratio like this typically reflects a bearish sentiment, suggesting that the momentum is against HNT. Moreover, the number of unsettled derivative contracts has fallen by 19.80% to $4.96 million in Open Interest, a typical bearish indicator. The decline in Open Interest, coupled with lower trading volume, reinforces the negative sentiment currently surrounding the asset.
Shifting Sentiment in the Spot Market
While the derivatives market reflects heavy selling activity, the spot market tells a slightly different story. Exchange Netflows for HNT have been negative over the past two days, indicating that traders are moving their assets off exchanges and into private wallets for long-term holding. This trend often signifies a bullish sentiment, as traders are showing faith in the long-term potential of the asset.
Over the last two days, approximately $250,000 worth of HNT has been moved out of exchanges. While this transfer of assets suggests a certain level of confidence, it has not been enough to overpower the overall bearish sentiment in the market. The current spot market movement might offer some hope for a recovery, but caution remains, as selling pressure is still dominant when viewed from a broader perspective.
The Key Price Levels: Will HNT Hold Above $2.85?
As HNT’s price continues to follow a descending trendline, it faces the risk of falling below its 2024 low of $2.85, a level established in June of last year. If selling pressure intensifies and momentum continues to push the price lower, HNT could test this level and potentially drop further.
However, the $3.315 mark remains a crucial support level for the altcoin. If HNT can hold above this level, it may offer a cushion that could prevent further declines. Traders will be watching this price point closely, as a break below $3.315 could signal a more severe drop toward the $2.85 level and beyond.
Despite the negative price action, there is a glimmer of hope for a short-term recovery. The altcoin’s funding rate has turned positive at 0.0176%, suggesting that some buying sentiment still exists. If this positive funding rate translates into increased buying pressure, it could help HNT hold its ground above key support levels and potentially pave the way for a rally.
Conclusion: Is HNT in Danger of Falling Below Its 2024 Low?
In conclusion, while HNT has been facing considerable selling pressure, the current market sentiment is mixed. The surge in selling volume in the derivatives market signals a bearish outlook in the short term. However, the negative Exchange Netflows in the spot market and the positive funding rate offer hope that a recovery may be possible.
HNT’s price will need to hold above critical support levels, such as $3.315, to avoid falling below its 2024 low of $2.85. If the selling pressure continues to mount and the buyers fail to defend these support zones, HNT could face further declines. For traders, caution remains key as the market sentiment could shift at any moment, and further downward movement is a real possibility.
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