Helium’s 10% rally under threat: Will HNT see a 35% drop next?

Key Takeaways

HNT has recorded notable gains recently, but supply zone ahead could be the end of it. Mounting selling pressure from the spot market and weakening momentum now threaten a sharp reversal.

Helium [HNT] surged by 10% over the past 24 hours, leading the crypto market during this period. However, exchange outflows and bearish indicators suggest that HNT’s rally may be short-lived.

According to AMBCrypto analysis, while HNT remains bullish on the surface, signs of weakening market structure and liquidity drainage indicate a likely pullback. Here’s what to watch.

HNT faces roadblock — Here’s what it means

A review of the 1-day chart showed HNT approaching a critical supply zone between $3.90 and $4.24. This area has historically triggered significant sell-offs.

On the 23rd of February, a test of this range resulted in a 42% drop. The second instance, on the 13th of April, led to a 17% decline over just three days. Most recently, a retest on the 28th of May saw HNT fall by 46%.

Source: TradingView

This repeated pattern suggests that a move into this supply zone could trigger another sharp drop—possibly ranging between 17% and 46%, with the average decline sitting around 35%.

Investors are reducing exposure

Some investors appear to be trimming their positions in anticipation of a correction.

Over the past four days, spot market participants have sold approximately $2.17 million worth of HNT, per CoinGlass data.

This selling trend is reflected in a consistent green histogram, indicating sustained outflows. The derivatives market mirrors this behavior.

Source: CoinGlass

Open Interest has climbed 4% to $7.34 million, showing an increase in trading activity.

However, the Long-to-Short ratio favors sellers, implying that most of the $364,000 in added liquidity over the past 24 hours came from short positions.

Trading volume has declined 10% even as price rose, typically a red flag for bullish momentum. A rally without rising volume suggests the move lacks strength, raising the risk of a breakdown.

Indicators signal a pullback

Technical indicators further support the bearish case.

The Money Flow Index (MFI), which tracks liquidity inflows and outflows, has entered overbought territory—above the 80 mark.

Source: TradingView

This suggests HNT is currently overvalued and vulnerable to a correction.

Additionally, the Accumulation/Distribution (A/D) indicator remains in negative territory. This discount phase points to more selling than buying activity and hints at sustained downward pressure.

If the A/D indicator continues to stay negative, HNT could face a significant drop in the coming days.