Helium (HNT) Defends $3 Support — Price Poised for Another 40% Bounce

Key Takeaways

• Helium (HNT) has bounced at the $3 horizontal support area.
• The HNT price broke out from a descending parallel channel.
• Can Helium’s increase continue until the $5.60 resistance area?

Helium’s performance in the current market cycle has been mixed. After a strong close to 2023, Helium carried its momentum to the first quarter of 2024, reaching its cycle high in February.

However, the trend reversed afterward, leading to a steady downtrend.

Another ill-fated rally started in the second half of 2024, leading to a lower high in December and a 70% decline, culminating in a low of $2.98 in February.

Despite the downturn, the $3 support level triggered a considerable bounce.

With HNT regaining strength, let’s analyze its price action and see where this bounce can take it.

HNT Price Bounces at Support

The weekly time frame HNT chart shows that the price broke out from the $3 horizontal area in December 2023, reaching a high of $11.06 in February 2024. However, the HNT price has failed to sustain its breakout, and the February high is the cycle high so far.

After a failed attempt at beginning another upward movement in December (black circle), Helium created a lower high, confirming a descending resistance trend line that has existed for over three years. HNT fell by 70% afterward, culminating with a low of $3.

While Helium’s failed breakout attempts are a bearish sign, the price’s remaining above the $3 horizontal area is bullish. After reaching it last week, HNT is creating a bullish candlestick this week.

Despite the bounce, technical indicators are bearish. The Relative Strength Index (RSI) and Moving Average Convergence/Divergence (MACD) are falling and have crossed their bearish thresholds at 50 and 0, respectively. So, the weekly time frame gives a slightly bearish HNT prediction.

Despite the long-term bearishness, the daily chart gives a more positive outlook. Helium’s price broke out from a descending parallel channel that contained most of the decline.

The breakout happened after the RSI and MACD generated bullish divergences (green), a sign often associated with bullish trend reversals.

So, while the upward movement could continue in the short term, the long-term trend is likely still bearish. The closest resistance area is $5.70-$5.80, 40% above the current price.

Rally Before Breakdown

The wave count aligns with the price action and indicator readings. The count suggests that the decline since the cycle high is a five-wave downward movement (black), indicating that the long-term trend is bearish.

Then, the ensuing increase is an A-B-C correction, confirming this possibility.

If the count is accurate, the HNT price has started a new five-wave downward movement to the downside and is currently in wave two. This fits the price action, which predicts a bounce before the long-term bearish trend continues.

Wave two could end near the 0.382-0.5 Fibonacci retracement resistance at $5.63-$6.44, creating a lower high. Then, the rest of the downward movement will likely take the HNT price down to new lows.

Helium’s Bounce Will Not Last

Helium’s price has increased 40% since bouncing at the $3 horizontal support area. The bounce caused a breakout from a descending parallel channel.

While the rally could continue until the price reaches at least the $5.60 resistance area, the long-term HNT trend is likely still bearish.