Grass (grass) 
Helium (HNT) has seen a significant increase of 158.15% since the beginning of July, showcasing a strong upward trend. The key question now is whether HNT will continue its climb or if a pullback is on the horizon.
Moving Average Convergence Divergence
Examining the daily Moving Average Convergence Divergence (MACD), we notice the histogram shifting from dark green to light green, indicating weakening bullish momentum. The MACD lines are beginning to converge, suggesting that the current uptrend may be losing steam. A potential bearish crossover could signal a reversal in trend.
RSI and Stochastic RSI
Both the Relative Strength Index (RSI) and Stochastic RSI are in overvalued territory, with readings above 60. Historically, when RSI and Stochastic RSI reach these levels, they tend to retreat significantly, often accompanied by a sharp price decline.
Support and Resistance Levels
The current price action shows strong resistance levels at $8.5 and $10. These levels have proven difficult to surpass or have acted as strong support levels in the past. Meanwhile, the $7 level serves as a weak area. If the price fails to break through $7, a more pronounced downtrend is likely to begin.
Fibonacci Confluence Levels
By applying Fibonacci retracement levels from three different time frames—the initial day of trading to the recent high, the low of June to the recent high, and the high of March to the low of June—we identify multiple confluence levels. These confluence levels are clustered around $6 and $4.7.
The area between $4.7 and $6 forms a “box of opportunity.”
This range presents a potential target zone for a short position, with the expectation that HNT could retrace to this area if the downtrend continues. Historical support lies at $3, but a drop to this level seems unlikely unless significant negative events occur in the broader market.
Strategic Considerations
Before initiating a short position, it’s important to confirm the downtrend. Although the trend has recently shifted, there’s always the possibility of a bear trap. To minimize risk, consider waiting for HNT to fall below $6.3958, which is the 23.6% Fibonacci retracement from the June low to the August high. Once HNT breaks below this level and it acts as resistance, the shorting opportunity becomes much safer.
Another factor to consider is the Visible Range Volume Profile, which shows a weak volume area between $5.5 and $6.5. Prices tend to move quickly through such low-volume zones, further supporting the likelihood of a downward move. However, currently, HNT is within a high-volume zone, which could potentially serve as a consolidation area.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
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