Helium [HNT] Tumbles 24% After Explosive Surge – Is Another Breakout Coming?

Recently, Helium (HNT) has shown its first signs of recovery after having been in a sustained downtrend since the end of January. On 12 April, the altcoin underwent a market structure break to the upside, just undercutting the previous lower high at $3.4. This suggested we had come to the end of a substantial downtrend, and as buyers appeared to be regaining strength, it appeared we might be at the start of an uptrend. 

Following the breakout, HNT hit a recent all-time high of $4.5 for that rally to only pull back to roughly $3.4, just under a 24% pullback. But, all hope is not lost; at least at this stage, the market structure remains bullish for HNT, suggesting some more upward potential might be on the cards in the near term. 

Key Support Levels to Watch

Helium’s current trading price is hovering around the 50% Fibonacci retracement level, which could act as a pivotal point. 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:

1. Bitcoin’s Volatility: Bitcoin [BTC] is struggling to confirm a local bottom. A potential decline below $83,000 could spark a wave of market-wide sell-offs, negatively impacting altcoins like HNT.
   
2. Weak Buying Pressure: The On-Balance Volume (OBV), a key metric for tracking buyer activity, failed to break above its February high, indicating that the bullish drive may lack the necessary momentum to push prices significantly higher.

Momentum Slows on Lower Timeframes

In the 4-hour time frame of HNT is facing a resistance level at approximately $3.7, which had been a bearish breaker block in the past. Price action has been capped in that zone over the past few days. The RSI also showed weakness in momentum, indicating that bulls are starting to lose momentum.

The on-balance volume was unable to set a new high in that time frame, which supports 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.

Trading Scenarios and Strategy

Currently, the short-term market structure off the 4-hour chart is bearish, so it is safe to stay cautious. If BTC drops below $83k, it will reinforce the bearish psychology, and HNT may drift toward the $2.75 – $3.00 zone.

On the other hand, if we bounce above $3.7 with solid OBV confirmation, we may have a bullish setup. In this case, traders would look for long opportunities as they target a move back toward the $4.5 region or higher.

Conclusion: Stay Alert and Watch BTC Closely

Helium [HNT] is currently 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 BTC’s price movements and Helium’s OBV closely for cues. A confirmed OBV uptrend and BTC stability are key factors that could fuel HNT’s next rally.