Helium Price Finally Breaks out From Corrective Pattern – HNT Bullish Confirmation Pending With $5.30 Reclaim
Is the Helium Correction Over? | Credit: Hameem Sarwar
Key Takeaways
- Helium has been on an upward trend since April 15, breaking out from a corrective pattern and validating it as support.
- The wave count suggests the price has started wave five after completing wave four between December 2023 and April 2024.
- Since the bounce, HNT has broken out from a corrective pattern but failed to reclaim an important horizontal resistance.
The year 2024 has not been kind to the Helium price. Even though it started with a bang, leading to new highs in February, the price has corrected for 70 days since. HNT has fallen 35% year to date.
Despite the decrease, there is a strong bounce ongoing since April 5. In fact, HNT has emerged as one of the best performers in the cryptocurrency market during this time. Can the price build on this momentum, leading to new highs, or will this be just a relief rally?
HNT Breaks Out, Retests Support
The HNT price bounced on April 25, validating a long-term ascending parallel channel (white) as support. The channel is created by connecting waves one and two in a five-wave upward movement.
In this type of movement, the retest is considered part of a fourth wave pullback, after which the price starts the fifth and final wave of the upward trend. If this is the case for HNT, the most likely target for the top is between $13.16-$13.36.
The target is created by the 1.61 external Fibonacci retracement of wave four (black) and by giving waves five 0.382 times the length of waves one and three (white). It is 195% above the current price.
The short-term movement shows that HNT broke out from a shorter-term descending parallel channel and validated it as support (green circle). The sub-wave count implies this is part of sub-wave two in the final upward movement.
The confirmation hinges on the HNT price reclaiming the $5.20 horizontal area, which currently presents resistance. Then, HNT will likely increase at an accelerated pace until it reaches the target.
HNT Bounce Creates Bullish Candlestick
The HNT price has corrected since reaching a yearly high of $11.05 in February 2024 (red circle), validating the $10.50 area as long-term resistance. The correction culminated with a low of $3.40 in April 2024, a decrease of 70% since the aforementioned high (green icon).
After reaching the support area last week, the HNT price bounced, creating a large bullish candlestick with a magnitude of 50%. The increase validated the $3.50 area as support. The level is important since it had previously acted as resistance before the price broke out in December 2023.
Even though the HNT price bounced, both the RSI and MACD give bearish signs. The RSI has crossed below 50 and the MACD has made a bearish cross (red icon). Also, both are trending downward, suggesting the trend is bearish.
So, the price action and indicator readings do not align. While the price action is bullish, indicators are bearish.
HNT Wave Count Shows a Completed Correction
The daily time frame wave count suggests HNT started the fifth and final wave in its increase. While at first glance it may seem that wave five has ended, the January-March 2024 increase (highlighted) is a three-wave structure. So, it is unlikely that it marked the fifth wave.
Rather, it could be the B wave in an irregular flat correction (black). If so, HNT has likely completed wave four with the aforementioned bounce, beginning the fifth and final wave of the upward movement. There are two visible signs pointing to this being the accurate outline for the future movement.
Firstly, the April 25 bounce (green circle) happened right at the resistance trend line of an ascending parallel channel (white) which connected waves one and two. Wave four commonly returns to this level before bouncing.
Secondly, the sub-waves inside wave four (black) show an A-B-C structure where waves A:C had a 1:1.61 ratio. This is the most common ration in irregular flat corrections.
If wave five has started, the first target for a top is at $13.60, followed by targets at $19.85 and $30. The targets are found by giving wave five 1:0.382, 1:0.618 and 1:1 times the length of waves one and three combined.
HNT Price Prediction: Reversal Not Confirmed Yet
A closer look at the daily time frame price action and indicator readings does not confirm the bullish trend reversal. This is because the price trades at an important resistance at $5.30, created by the resistance trend line of a descending parallel channel and the $5.30 horizontal resistance area. A breakout above this level will confirm the bullish trend reversal.
Nevertheless, the MACD and RSI both support the possibility of a breakout. After generating bullish divergence (green), the RSI increased above 50. Similarly, the MACD made a bullish cross and is moving upward.
On the other hand, failure to do so can cause a decrease to the channel’s support trend line at $3. Interestingly, this will not invalidate the long-term count, though it will deepen the correction. The count will be invalidated with a decrease below the wave one high at $2.32, since Elliott Wave rules state that wave four cannot go into wave one territory.
May Could See a Turnaround Through a Reclaim
To conclude, there are mixed readings surrounding the HNT price movement. In the weekly time frame, the price action is bullish, but indicator readings are bearish. In the daily one, the wave count and indicator readings are bullish. But, the price action does not confirm the reversal.
The outlook for May depends on whether HNT breaks out above $5.30 or faces rejection. A breakout and reclaim is a more likely scenario because of the wave count.
