Helium (HNT) surged 10%: A bounce back signal or just a dead cat bounce?

Helium (HNT) has risen to the sky by 10% in the last 24 hours, leading the crypto market during this period. However, behind this impressive bounce back are hidden warnings: funds are quietly withdrawing from exchanges and technical indicators are signaling negatively, suggesting that the current upward trend may not be sustainable.

According to analysis from Bitcoin Magazine, although HNT is still holding a green color on the price chart, the weakening market structure along with dwindling liquidity could pave the way for a significant correction in the near future. Below are the key factors that investors need to keep an eye on.

HNT faces an important resistance level

On the daily frame, the price of HNT is approaching an important supply zone, ranging from $3.90 to $4.24 — an area that has often become a "pressure point" causing the price to drop sharply.

History shows that this resistance level is not easy to overcome. On February 23, when HNT reached this price zone, the coin lost up to 42% of its value. By April 13, another approach caused the price to drop an additional 17% in just three days. Most recently, on May 28, HNT slid deep again by 46% after retesting this area.

Daily chart of HNT/USDT | Source: TradingViewThe repeating adjustment model shows that if HNT cannot break through the high resistance zone, a new drop is likely to occur — with a fluctuation range from 17% to 46%, and an average decline of about 35%.

Investors are beginning to reduce exposure to HNT

Some investors seem to be actively reducing their positions, indicating expectations of a price correction that may soon occur.

According to data from CoinGlass, in the past four days, traders in the spot market have sold about 2.17 million USD HNT — a clear sign that profit-taking pressure is increasing. This selling trend is reflected through the large green bars in the past few days, indicating that the outflow of funds is still occurring steadily. At the same time, the derivatives market has also recorded similar signals.

Source: CoinGlassThe open contract volume (OI) has risen to the sky by 4%, reaching 7.34 million USD, indicating that speculative activity is increasing. However, the balance between Long and Short orders is tilted towards the bears, implying that most of the additional 364,000 USD liquidity in the past 24 hours has come from Short positions.

Notably, although the price of HNT continues to rise to the sky, trading volume has decreased by 10% — a warning sign that cannot be ignored. A price increase without a corresponding trading volume often reflects a lack of sustainable momentum, thereby increasing the risk of short-term corrections.

Technical indicators lean towards a correction trend

The Money Flow Index (MFI), a tool for measuring the flow of capital into and out of assets, has exceeded the threshold of 80 — a range considered overbought. This indicates that HNT may be overvalued and at risk of a short-term correction.

Source: TradingViewNotably, the Accumulation/Distribution – A/D( indicator remains in negative territory, indicating that selling pressure is dominating over buying force. This is a clear sign that the market is entering a discount phase.

If this trend does not reverse soon, HNT may face a significant decline in the coming days.

SN_Nour